SECTION 1.63. Proposal Requirements: Fiscal and Administrative Responsibility

(a) A nonprofit corporation organized under the Library Systems Act, §441.131, seeking to contract with the Texas State Library and Archives Commission as a regional library system must demonstrate fiscal and administrative responsibility as determined annually by the state library from the following information submitted by the nonprofit corporation:

(1) articles of incorporation with the Office of the Secretary of State;

(2) bylaws adopted by the board of directors and approved by the membership;

(3) policies and procedures of the corporation on financial management, personnel, and procurement as adopted by the board of directors;

(4) long-range plan (biennial budget) (see §1.43 of this title (relating to Long-Range Plan of System Services));

(5) annual program and budget (see §1.44 of this title (relating to Annual Program and Budget for System Services));

(6) documentation of tax status with appropriate authorities; and

(7) detailed business plan, including cash flow analysis, cash flow management plan, verification of cash reserves and lines of credit, risk analysis, risk management plan, verification of specified insurance coverage, and a plan providing for the annual accumulation of cash reserves as described in §1.64 of this title (relating to Cash Reserves: Regional Library System) such that the reserve shall be fully funded by the date of submission of the sixth annual program of service submitted under the terms of this rule.

(b) A nonprofit corporation organized under subsection (a) of this section, seeking to contract with a third party private business to administer the system (when the contract exceeds $100,000, or 20 percent of the system operation grant, whichever is less) must demonstrate fiscal and administrative responsibility as determined annually by the state library from the following information submitted by the nonprofit corporation and private business, in addition to the information submitted under subsection (a) of this section:

(1) contracts between the business and the nonprofit corporation;

(2) performance deposit in the form of an assignment of a savings account, a bank letter of credit, a continuous bond, a U.S. treasury bond readily convertible to cash, or any cash equivalent item, the amount to be not less than 10% of the proposed contract;

(3) certificate of good standing from the Comptroller of Public Accounts;

(4) tax returns of the business for the last three years;

(5) audited financial statements of the business for the last three years, and;

(6) detailed business plan, including cash flow analysis, cash flow management plan, verification of lines of credit, risk analysis, risk management plan, and verification of specified insurance coverage.

(c) A business (sole proprietorship, partnership, or corporation) seeking to contract with the Texas State Library and Archives Commission to administer services to a regional library system must demonstrate fiscal and administrative responsibility annually as determined by the state library from the following information submitted by the business:

(1) contracts between the business and two-thirds of the governing bodies of the member libraries;

(2) performance deposit in the form of an assignment of a savings account, a bank letter of credit, a continuous bond, a U.S. treasury bond readily convertible to cash, or any cash equivalent item, the amount to be not less than 10% of the proposed contract;

(3) certificate of good standing from the Comptroller of Public Accounts;

(4) tax returns of the business for the last three years;

(5) audited financial statements of the business for the last three years;

(6) long-range plan (biennial budget) (see §1.43 of this title (relating to Long-Range Plan of System Services));

(7) annual program and budget (see §1.44 of this title (relating to Annual Program and Budget for System Services)); and

(8) detailed business plan, including cash flow analysis, cash flow management plan, verification of lines of cash reserves and credit, risk analysis, risk management plan, and verification of specified insurance coverage.

(d) Grants or contracts to regional library systems or other nonprofit corporations shall be administered by the State Library and Archives Commission according to the Uniform Grant and Contract Management Act (Government Code, Chapter 783) and the rules for administering this act (1 TAC §5.141 et seq.), unless federal statute or policy supersedes them.

Source Note: The provisions of this §1.63 adopted to be effective April 30, 1985, 10 TexReg 1227; amended to be effective March 24, 1993, 18 TexReg 1679; amended to be effective July 17, 1997, 22 TexReg 6429; amended to be effective October 17, 2004, 29 TexReg 9532