By:  Eckels                                            H.B. No. 939
       73R710 LGF-F
                                 A BILL TO BE ENTITLED
    1-1                                AN ACT
    1-2  relating to procurement of public improvements at the least cost.
    1-3        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
    1-4        SECTION 1.  Chapter 271, Local Government Code, is amended by
    1-5  adding Subchapter E to read as follows:
    1-6               SUBCHAPTER E.  LEAST COST REVIEW PROGRAM
    1-7        Sec. 271.101.  PURPOSE.  (a)  This subchapter creates the
    1-8  least cost review program to assist governmental entities in
    1-9  determining the least cost of public improvements performed by a
   1-10  governmental entity within the state.  Governmental entities
   1-11  performing public improvements not within an exemption of this
   1-12  subchapter shall participate in the program and shall apply the
   1-13  policies and requirements established under this subchapter.
   1-14        (b)  This subchapter is adopted to ensure that public
   1-15  improvements are procured at the least cost.
   1-16        Sec. 271.102.  DEFINITIONS.  In this subchapter:
   1-17              (1)  "Component purchases" means purchases of the
   1-18  component parts of an item that in normal purchasing practices
   1-19  would be purchased in one purchase.
   1-20              (2)  "Cost comparison statement" means a statement by a
   1-21  governmental entity that compares the cost of purchasing a public
   1-22  improvement with the cost of providing the improvement by the
   1-23  governmental entity.
   1-24              (3)  "Governmental entity" means:
    2-1                    (A)  a county with a population of 50,000 or
    2-2  more;
    2-3                    (B)  a municipality;
    2-4                    (C)  a common or independent school district;
    2-5                    (D)  a hospital district or authority;
    2-6                    (E)  a housing authority;
    2-7                    (F)  a water district or authority;
    2-8                    (G)  a utility district or authority;
    2-9                    (H)  a road utility district; or
   2-10                    (I)  an agency or instrumentality of a
   2-11  governmental entity described by this subdivision.
   2-12              (4)  "In-house cost estimate" means a report by a
   2-13  governmental entity that contains the computations of probable cost
   2-14  to the governmental entity to provide a public improvement using
   2-15  the personnel, equipment, or facilities of the governmental entity.
   2-16              (5)  "Public improvement" means the construction,
   2-17  alteration, repair, or renovation (including all materials,
   2-18  machinery, fixtures, tools, labor, or a combination of those items,
   2-19  incorporated into or consumed in the prosecution of the work) of a
   2-20  facility owned and operated by a governmental entity, including a
   2-21  building, structure, site improvement, road, street, highway,
   2-22  bridge, drainage structure, storm sewer, sanitary sewer, wastewater
   2-23  treatment or pumping facility, water main, and water storage
   2-24  facility.
   2-25              (6)  "Separate purchases" means purchases, made
   2-26  separately, of items that in normal purchasing practices would be
   2-27  purchased in one purchase.
    3-1              (7)  "Sequential purchases" means purchases, over a
    3-2  period, of items that in normal purchasing practices would be
    3-3  purchased in one purchase.
    3-4        Sec. 271.103. EXEMPT PURCHASES.  This subchapter does not
    3-5  apply to a purchase by a governmental entity, if the purchase:
    3-6              (1)  is exempt from competitive bidding under the
    3-7  Professional Services Procurement Act (Article 664-4, Vernon's
    3-8  Texas Civil Statutes);
    3-9              (2)  is for an amount less than $10,000 including all
   3-10  other component purchases, separate purchases, and sequential
   3-11  purchases by the governmental entity;
   3-12              (3)  is for a public improvement necessitated by public
   3-13  calamity in which the use of personnel, equipment, or facilities of
   3-14  the governmental entity will more expediently relieve the necessity
   3-15  of its citizens or preserve the property of its citizens; or
   3-16              (4)  is a public improvement purchased under the
   3-17  competitive bidding requirements of Subchapter B.
   3-18        Sec. 271.104.  LEAST COST REVIEW.  (a)  Each year, before the
   3-19  30th day before adoption of a budget by a governmental entity, the
   3-20  governmental entity shall submit a least cost review for
   3-21  consideration and approval at a public meeting of the governing
   3-22  body of the governmental entity if the governmental entity will be
   3-23  providing nonexempt public improvements proposed to be constructed
   3-24  by use of personnel, equipment, or facilities of the governmental
   3-25  entity.
   3-26        (b)  Before the 14th day before consideration and approval of
   3-27  the governing body at a public meeting, the governmental entity
    4-1  shall furnish to any citizen within the jurisdictional limits of
    4-2  the governmental entity a copy of the least cost review upon
    4-3  payment of a reasonable fee to reimburse for copying costs.
    4-4        (c)  The least cost review shall contain the following
    4-5  elements:
    4-6              (1)  a list of every nonexempt public improvement to be
    4-7  provided during the budget year by the use of the personnel,
    4-8  equipment, or facilities of the governmental entity;
    4-9              (2)  an estimate of the quantities for each
   4-10  classification of the work in each nonexempt public improvement,
   4-11  according to classifications normally used on competitively bid
   4-12  public improvements;
   4-13              (3)  a cost estimate of probable costs for providing
   4-14  each nonexempt public improvement by competitive bid, as determined
   4-15  by multiplying the quantities of each classification of the work by
   4-16  unit costs established by comparable bid data within the locale of
   4-17  the governmental entity;
   4-18              (4)  an in-house cost estimate of probable costs of
   4-19  providing each nonexempt public improvement using the personnel,
   4-20  equipment, or facilities of the governmental entity, including all
   4-21  direct and indirect costs of labor, materials, administration,
   4-22  investment, and maintenance of equipment, under the state auditor's
   4-23  cost accounting procedures and instructions relating to in-house
   4-24  cost estimates as provided in Section 13.04, State Purchasing and
   4-25  General Services Act (Article 601b, Vernon's Texas Civil Statutes);
   4-26              (5)  a cost comparison statement for each nonexempt
   4-27  public improvement listed in the least cost review; and
    5-1              (6)  a determination as to whether the standard of
    5-2  quality of the public improvement using personnel, equipment, or
    5-3  facilities of the governmental entity will be the same as if the
    5-4  public improvement were purchased pursuant to competitive bidding
    5-5  requirements of Subchapter B.
    5-6        Sec. 271.105.  REDUCTION OF COSTS.  If the least cost review
    5-7  for any public improvement by the governmental entity indicates
    5-8  that the least cost to the entity would be by purchase under the
    5-9  competitive bidding requirements of Subchapter B, the governmental
   5-10  entity shall purchase the public improvement by competitive bid
   5-11  unless the additional cost is less than 10 percent and the
   5-12  governing body of the governmental entity passes a resolution
   5-13  specifically describing:
   5-14              (1)  the non-cost advantages of providing the public
   5-15  improvement using personnel, equipment, or facilities of the
   5-16  governmental entity; and
   5-17              (2)  a proposal for reducing costs of the personnel,
   5-18  equipment, or facilities used in the public improvement so that the
   5-19  total costs are reduced to the costs of a competitively bid public
   5-20  improvement.
   5-21        Sec. 271.106.  MAINTENANCE OF COST RECORDS.  For each public
   5-22  improvement purchased using the personnel, equipment, or facilities
   5-23  of a governmental entity, the governmental entity shall maintain
   5-24  and preserve as a public record a true and accurate account of all
   5-25  direct and indirect actual costs of labor, materials,
   5-26  administration, investment, and maintenance of equipment under the
   5-27  state auditor's accounting procedures and instructions as provided
    6-1  in Section 13.04, State Purchasing and General Services Act
    6-2  (Article 601b, Vernon's Texas Civil Statutes).
    6-3        Sec. 271.107.  CRIMINAL PENALTIES.  (a)  An officer or
    6-4  employee of a governmental entity commits an offense if the officer
    6-5  or employee intentionally or knowingly makes or authorizes
    6-6  separate, sequential, or component purchases to avoid requirements
    6-7  of a least cost review described by Section 271.104.  An offense
    6-8  under this subsection is a Class B misdemeanor.
    6-9        (b)  An officer or employee of a governmental entity commits
   6-10  an offense if the officer or employee intentionally or knowingly
   6-11  violates the least cost review requirements of Section 271.104.  An
   6-12  offense under this subsection is a Class B misdemeanor.
   6-13        (c)  An officer or employee of a governmental entity commits
   6-14  an offense if the officer or employee intentionally or knowingly
   6-15  violates this subchapter, other than by conduct described in
   6-16  Subsection (a) or (b).  An offense under this subsection is a Class
   6-17  C misdemeanor.
   6-18        Sec. 271.108.  REMOVAL; INELIGIBILITY.  (a)  The final
   6-19  conviction of an officer or employee of a governmental entity for
   6-20  an offense under Section 271.107(a) or (b) results in the immediate
   6-21  removal from office or employment of that person.
   6-22        (b)  For four years after the date of the final conviction,
   6-23  the removed officer or employee is ineligible:
   6-24              (1)  to be a candidate for or to be appointed or
   6-25  elected to a public office in this state;
   6-26              (2)  to be employed by the governmental entity with
   6-27  which the person served when the offense occurred; and
    7-1              (3)  to receive any compensation through a contract
    7-2  with that governmental entity.
    7-3        (c)  This section does not prohibit the payment of retirement
    7-4  or workers' compensation benefits to the removed officer or
    7-5  employee.
    7-6        Sec. 271.109.  INJUNCTIVE RELIEF.  Any citizen within the
    7-7  jurisdictional limits of the governmental entity may enjoin the
    7-8  actions of a governmental entity in violation of this subchapter.
    7-9        SECTION 2.  The importance of this legislation and the
   7-10  crowded condition of the calendars in both houses create an
   7-11  emergency   and   an   imperative   public   necessity   that   the
   7-12  constitutional rule requiring bills to be read on three several
   7-13  days in each house be suspended, and this rule is hereby suspended.