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.