1-1  By:  McCall (Senate Sponsor - Shelley)                H.B. No. 1185
    1-2        (In the Senate - Received from the House May 10, 1993;
    1-3  May 11, 1993, read first time and referred to Committee on
    1-4  Intergovernmental Relations; May 20, 1993, reported adversely, with
    1-5  favorable Committee Substitute by the following vote:  Yeas 11,
    1-6  Nays 0; May 20, 1993, sent to printer.)
    1-7                            COMMITTEE VOTE
    1-8                          Yea     Nay      PNV      Absent 
    1-9        Armbrister         x                               
   1-10        Leedom             x                               
   1-11        Carriker           x                               
   1-12        Henderson          x                               
   1-13        Madla              x                               
   1-14        Moncrief           x                               
   1-15        Patterson          x                               
   1-16        Rosson             x                               
   1-17        Shapiro            x                               
   1-18        Wentworth          x                               
   1-19        Whitmire           x                               
   1-20  COMMITTEE SUBSTITUTE FOR H.B. No. 1185                By:  Whitmire
   1-21                         A BILL TO BE ENTITLED
   1-22                                AN ACT
   1-23  relating to purchasing by local governments.
   1-24        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
   1-25        SECTION 1.  Section 252.002, Local Government Code, is
   1-26  amended to read as follows:
   1-27        Sec. 252.002.  Municipal Charter Controls in Case of
   1-28  Conflict.  Any provision in the charter of a home-rule municipality
   1-29  that relates to the notice of contracts, advertisement of the
   1-30  notice, requirements for the taking of sealed bids based on
   1-31  specifications for public improvements or purchase, <or> the manner
   1-32  of publicly opening bids or reading them aloud, or the manner of
   1-33  letting contracts and that is in conflict with this chapter
   1-34  controls over this chapter unless the municipality elects to have
   1-35  this chapter supersede the charter.
   1-36        SECTION 2.  Section 252.021, Local Government Code, is
   1-37  amended to read as follows:
   1-38        Sec. 252.021.  Competitive Bidding and Competitive Proposal
   1-39  Requirements.  (a)  Except as provided by Subsection b, before
   1-40  <Before> a municipality <with 50,000 or more inhabitants> may enter
   1-41  into a contract that requires an expenditure of more than $15,000
   1-42  <$10,000> from one or more municipal funds, the municipality must
   1-43  comply with the procedure prescribed by this chapter for
   1-44  competitive sealed bidding or competitive sealed proposals.
   1-45        (b)  Before a municipality with a population of less <fewer>
   1-46  than 1.5 million <50,000 inhabitants> may enter into a contract for
   1-47  insurance that requires an expenditure of more than $5,000 from one
   1-48  or more municipal funds, the municipality must comply with the
   1-49  procedure prescribed by this chapter for competitive sealed bidding
   1-50  or competitive sealed proposals.
   1-51        (c)  A municipality may use the competitive sealed proposal
   1-52  procedure only for the purchase of insurance or for high technology
   1-53  procurements.
   1-54        SECTION 3.  Section 252.022(a), Local Government Code, is
   1-55  amended to read as follows:
   1-56        (a)  This chapter does not apply to an expenditure for:
   1-57              (1)  a procurement made because of a public calamity
   1-58  that requires the immediate appropriation of money to relieve the
   1-59  necessity of the municipality's residents or to preserve the
   1-60  property of the municipality;
   1-61              (2)  a procurement necessary to preserve or protect the
   1-62  public health or safety of the municipality's residents;
   1-63              (3)  a procurement necessary because of unforeseen
   1-64  damage to public machinery, equipment, or other property;
   1-65              (4)  a procurement for personal or professional
   1-66  services;
   1-67              (5)  a procurement for work that is performed and paid
   1-68  for by the day as the work progresses;
    2-1              (6)  a purchase of land or a right-of-way;
    2-2              (7)  a procurement of items that are available from
    2-3  only one source, including:
    2-4                    (A)  items that are available from only one
    2-5  source because of patents, copyrights, secret processes, or natural
    2-6  monopolies;
    2-7                    (B)  films, manuscripts, or books;
    2-8                    (C)  electricity, gas, water, and other utility
    2-9  services;
   2-10                    (D)  captive replacement parts or components for
   2-11  equipment;
   2-12                    (E)  books, papers, and other library materials
   2-13  for a public library that are available only from the persons
   2-14  holding exclusive distribution rights to the materials; and
   2-15                    (F)  management services provided by a nonprofit
   2-16  organization to a municipal museum, park, zoo, or other facility to
   2-17  which the organization has provided significant financial or other
   2-18  benefits;
   2-19              (8)  a purchase of rare books, papers, and other
   2-20  library materials for a public library;
   2-21              (9)  paving drainage, street widening, and other public
   2-22  improvements, or related matters, if at least one-third of the cost
   2-23  is to be paid by or through special assessments levied on property
   2-24  that will benefit from the improvements;
   2-25              (10)  a public improvement project, authorized by the
   2-26  voters of the municipality, for which there is a deficiency of
   2-27  funds for completing the project in accordance with the plans and
   2-28  purposes authorized by the voters;
   2-29              (11)  a payment under a contract by which a developer
   2-30  participates in the construction of a public improvement as
   2-31  provided by Subchapter C, Chapter 212; <and>
   2-32              (12)  personal property sold:
   2-33                    (A)  at an auction by a state licensed
   2-34  auctioneer;
   2-35                    (B)  at a going out of business sale held in
   2-36  compliance with Subchapter F, Chapter 17, Business & Commerce Code;
   2-37  <or>
   2-38                    (C)  by a political subdivision of this state, a
   2-39  state agency of this state, or an entity of the federal government;
   2-40  or
   2-41                    (D)  under an interlocal agreement for
   2-42  cooperative purchasing administered by a regional planning
   2-43  commission established under Chapter 391; and
   2-44              (13)  services performed by blind or severely disabled
   2-45  persons.
   2-46        SECTION 4.  Subsection (a), Section 252.041, Local Government
   2-47  Code, is amended to read as follows:
   2-48        (a)  If the competitive sealed bidding requirement applies to
   2-49  the contract, notice of the time and place at which the bids will
   2-50  be publicly opened and read aloud <contract will be let> must be
   2-51  published at least once a week for two consecutive weeks in a
   2-52  newspaper published in the municipality.  The date of the first
   2-53  publication must be before the 14th day before the date set to
   2-54  publicly open the bids and read them aloud <let the contract>.  If
   2-55  no newspaper is published in the municipality, the notice must be
   2-56  posted at the city hall for 14 days before the date set to publicly
   2-57  open the bids and read them aloud <let the contract>.
   2-58        SECTION 5.  The heading of Section 252.042, Local Government
   2-59  Code, is amended to read as follows:
   2-60        Sec. 252.042.  REQUESTS FOR PROPOSALS FOR INSURANCE AND HIGH
   2-61  TECHNOLOGY PROCUREMENTS.
   2-62        SECTION 6.  Subchapter B, Chapter 252, Local Government Code,
   2-63  is amended by adding Section 252.0215 to read as follows:
   2-64        Sec. 252.0215.  COMPETITIVE BIDDING IN RELATION TO
   2-65  HISTORICALLY UNDERUTILIZED BUSINESSES.  A municipality, in making
   2-66  an expenditure of more than $3,000 but less than $15,000, shall
   2-67  contact at least two disadvantaged businesses on a rotating basis,
   2-68  based on information provided by the Office of Small Business
   2-69  Assistance of the Texas Department of Commerce pursuant to Section
   2-70  1.03, State Purchasing and General Services Act (Article 601b,
    3-1  Vernon's Texas Civil Statutes).  If the list fails to identify a
    3-2  disadvantaged business in the county in which the city is situated,
    3-3  the city is exempt from this section.
    3-4        SECTION 7.  Section 262.023(a), Local Government Code, is
    3-5  amended to read as follows:
    3-6        (a)  Before <Except as provided by Subsection (d), before> a
    3-7  county may purchase one or more items under a contract that will
    3-8  require an expenditure exceeding $15,000 <$10,000>, the
    3-9  commissioners court of the county must comply with the competitive
   3-10  bidding or competitive proposal procedures prescribed by this
   3-11  subchapter.  All bids or proposals must be sealed.
   3-12        SECTION 8.  Section 262.030, Local Government Code, is
   3-13  amended to read as follows:
   3-14        Sec. 262.030.  ALTERNATIVE COMPETITIVE PROPOSAL PROCEDURE FOR
   3-15  INSURANCE, <OR> HIGH TECHNOLOGY ITEMS, AND SPECIAL SERVICES.
   3-16  (a)  The competitive proposal procedure provided by this section
   3-17  may be used for the purchase of insurance, <or> high technology
   3-18  items, and any of the following special services:
   3-19              (1)  janitorial services;
   3-20              (2)  landscape maintenance;
   3-21              (3)  travel management;
   3-22              (4)  recycling; and
   3-23              (5)  vending, concession, or commissary services.
   3-24        (b)  Quotations must be solicited through a request for
   3-25  proposals.  Public notice for the request for proposals must be
   3-26  made in the same manner as provided in the competitive bidding
   3-27  procedure.  The request for proposals must specify the relative
   3-28  importance of price and other evaluation factors.  The award of the
   3-29  contract shall be made to the responsible offeror whose proposal is
   3-30  determined to be the lowest evaluated offer resulting from
   3-31  negotiation, taking into consideration the relative importance of
   3-32  price and other evaluation factors set forth in the request for
   3-33  proposals.
   3-34        (c) <(b)>  If provided in the request for proposals,
   3-35  proposals shall be opened so as to avoid disclosure of contents to
   3-36  competing offerors and kept secret during the process of
   3-37  negotiation.  All proposals that have been submitted shall be
   3-38  available and open for public inspection after the contract is
   3-39  awarded, except for trade secrets and confidential information
   3-40  contained in the proposals and identified as such.
   3-41        (d) <(c)>  As provided in the request for proposals and under
   3-42  rules adopted by the commissioners court, discussions may be
   3-43  conducted with responsible offerors who submit proposals determined
   3-44  to be reasonably susceptible of being selected for award.  Offerors
   3-45  must be accorded fair and equal treatment with respect to any
   3-46  opportunity for discussion and revision of proposals, and revisions
   3-47  may be permitted after submission and before award for the purpose
   3-48  of obtaining best and final offers.
   3-49        SECTION 9.  Section 262.031(b), Local Government Code, is
   3-50  amended to read as follows:
   3-51        (b)  If a change order involves an increase or decrease in
   3-52  cost of $50,000 <$15,000> or less, the commissioners court may
   3-53  grant general authority to an employee to approve the change
   3-54  orders.  However, the original contract price may not be increased
   3-55  by more than 25 percent unless the change order is necessary to
   3-56  comply with a federal or state statute, rule, regulation, or
   3-57  judicial decision enacted, adopted, or rendered after the contract
   3-58  was made.  The original contract price may not be decreased by 18
   3-59  percent or more without the consent of the contractor.
   3-60        SECTION 10.  Subchapter C, Chapter 262, Local Government
   3-61  Code, is amended by adding Section 262.0235 to read as follows:
   3-62        Sec. 262.0235.  COMPETITIVE BIDDING IN RELATION TO
   3-63  HISTORICALLY UNDERUTILIZED BUSINESS.  A county, in making an
   3-64  expenditure of more than $3,000 but less than $15,000, shall
   3-65  contact at least two disadvantaged businesses on a rotating basis,
   3-66  based on information provided by the Office of Small Business
   3-67  Assistance of the Texas Department of Commerce pursuant to Section
   3-68  1.03, State Purchasing and General Services Act (Article 601b,
   3-69  Vernon's Texas Civil Statutes).  If the list fails to identify a
   3-70  disadvantaged business in the county, the county is exempt from
    4-1  this section.
    4-2        SECTION 11.  Section 263.152(a), Local Government Code, is
    4-3  amended to read as follows:
    4-4        (a)  The commissioners court of a county may:
    4-5              (1)  periodically sell the county's surplus or salvage
    4-6  property by competitive bid or auction, except that competitive
    4-7  bids or an auction is not necessary if the purchaser is another
    4-8  county;
    4-9              (2)  offer the property as a trade-in for new property
   4-10  of the same general type if the commissioners court considers that
   4-11  action to be in the best interests of the county; or
   4-12              (3)  order any of the property to be destroyed or
   4-13  otherwise disposed of as worthless if the commissioners court
   4-14  undertakes to sell that property under Subdivision (1) and is
   4-15  unable to do so because no bids are made.
   4-16        SECTION 12.  Section 271.024, Local Government Code, is
   4-17  amended to read as follows:
   4-18        Sec. 271.024.  Competitive Bidding Procedure Applicable to
   4-19  Contract.  If a governmental entity is required by statute to award
   4-20  a contract for the construction, repair, or renovation of a
   4-21  structure, road, highway, or other improvement or addition to real
   4-22  property on the basis of competitive bids, and if the contract
   4-23  requires the expenditure of more than $15,000 <$10,000> from the
   4-24  funds of the entity, the bidding on the contract must be
   4-25  accomplished in the manner provided by this subchapter.
   4-26        SECTION 13.  Subsections (a) and (b), Section 271.055, Local
   4-27  Government Code, are amended to read as follows:
   4-28        (a)  An issuer must give notice of the time, date, and place
   4-29  at which the issuer will publicly open the bids on a contract <let
   4-30  a contract> for which competitive bidding is required by this
   4-31  subchapter and read the bids aloud.  The notice must be given in
   4-32  accordance with Subsection (b) or in accordance with:
   4-33              (1)  Chapter 252, if the issuer is a municipality;
   4-34              (2)  the municipal charter of the issuer, if the issuer
   4-35  is a home-rule municipality; or
   4-36              (3)  the County Purchasing Act (Subchapter C, Chapter
   4-37  262), if the issuer is a county.
   4-38        (b)  If an issuer gives notice under this subsection, the
   4-39  notice must:
   4-40              (1)  be published once a week for two consecutive weeks
   4-41  in a newspaper, as defined by Chapter 84, Acts of the 43rd
   4-42  Legislature, 1st Called Session, 1933 (Article 28a, Vernon's Texas
   4-43  Civil Statutes), that is of general circulation in the area of the
   4-44  issuer, with the date of the first publication to be before the
   4-45  14th day before the date set for the public opening of the bids and
   4-46  the reading of the bids aloud <receipt of bids>; and
   4-47              (2)  state that plans and specifications for the work
   4-48  to be done or specifications for the machinery, supplies,
   4-49  equipment, or materials to be purchased are on file with a
   4-50  designated official of the issuer and may be examined without
   4-51  charge.
   4-52        SECTION 14.  Chapter 271, Local Government Code, is amended
   4-53  by adding Subchapter E to read as follows:
   4-54             SUBCHAPTER E.  COOPERATIVE PURCHASING PROGRAM
   4-55        Sec. 271.091.  DEFINITIONS.  In this subchapter:
   4-56              (1)  "Local cooperative organization" means an
   4-57  organization established to provide local governments access to
   4-58  contracts with vendors for the purchase of materials, supplies,
   4-59  services, or equipment.
   4-60              (2)  "Local government" means a county, municipality,
   4-61  special district, school district, junior college district, or
   4-62  other legally constituted political subdivision of the state.
   4-63        Sec. 271.092.  COOPERATIVE PURCHASING PROGRAM PARTICIPATION.
   4-64  (a)  A local government may participate in a cooperative purchasing
   4-65  program with another local government or a local cooperative
   4-66  organization.
   4-67        (b)  A participating local government may sign an agreement
   4-68  with the other local government or cooperative organization, as
   4-69  applicable, stating that the signing local government will:
   4-70              (1)  designate a person to act under the direction of,
    5-1  and on behalf of, that governmental body in all matters relating to
    5-2  the program;
    5-3              (2)  make payments to the other local government or
    5-4  cooperative organization or directly to a vendor under a contract
    5-5  made under this subchapter, as provided in the agreement between
    5-6  the participating local government and the other local government
    5-7  or cooperative organization; and
    5-8              (3)  be responsible for a vendor's compliance with
    5-9  provisions relating to the quality of items and terms of delivery,
   5-10  to the extent provided in the agreement between the participating
   5-11  local government and the other local government or cooperative
   5-12  organization.
   5-13        (c)  A local government that purchases under this program
   5-14  complies with the competitive bidding requirements of this title or
   5-15  other state law if the applicable competitive bidding requirements
   5-16  are followed by the entity awarding the contract.
   5-17        SECTION 15.  Subchapter Z, Chapter 271, Local Government
   5-18  Code, is amended by adding Section 271.903 to read as follows:
   5-19        Sec. 271.903.  COMMITMENT OF CURRENT REVENUE.  (a)  If a
   5-20  contract for the acquisition, including lease, of real or personal
   5-21  property retains to the governing body of a local government the
   5-22  continuing right to terminate at the expiration of each budget
   5-23  period of the local government during the term of the contract, is
   5-24  conditioned on a best efforts attempt by the governing body to
   5-25  obtain and appropriate funds for payment of the contract, or
   5-26  contains both the continuing right to terminate and the best
   5-27  efforts conditions, the contract is a commitment of the local
   5-28  government's current revenues only.
   5-29        (b)  In this section, "local government" means a
   5-30  municipality, county, school district, special purpose district or
   5-31  authority, or other political subdivision of this state.
   5-32        SECTION 16.  Subchapter Z, Chapter 271, Local Government
   5-33  Code, is amended by adding a new Section 271.904 to read as
   5-34  follows:
   5-35        Sec. 271.904.  INDEMNIFICATION.  (a)  A contract for design
   5-36  or engineering services to which a governmental agency is a party
   5-37  may not include a provision requiring a design professional
   5-38  registered under Act. 3271a, V.A.C.S. to indemnify the governmental
   5-39  agency for damages arising from the sole negligence of the
   5-40  governmental agency.  A provision in violation of this section is
   5-41  void.
   5-42        (b)  In this section, "governmental agency" has the meaning
   5-43  assigned by Section 271.003.
   5-44        SECTION 17.  Section 1.03, State Purchasing and General
   5-45  Services Art (Article 601b, Vernon's Texas Civil Statutes), is
   5-46  amended by adding Subsection (e) to read as follows:
   5-47        (e)  The office shall provide a copy of the directory to each
   5-48  county and incorporated city twice annually, in January and July.
   5-49        SECTION 18.  Sections 262.023(d) and 271.005(b), Local
   5-50  Government Code, are repealed.
   5-51        SECTION 19.  The change in law made by this Act relating to
   5-52  the contractual amount that requires a county or a municipality to
   5-53  solicit competitive bids or proposals, applies only to a contract
   5-54  for which the notice soliciting bids or proposals is first
   5-55  published or posted on or after September 1, 1993.  A contract for
   5-56  which the notice is first published or posted before September 1,
   5-57  1993, is subject to the law as it existed at the time the notice
   5-58  was first published or posted, and the former law is continued in
   5-59  effect for that purpose.
   5-60        SECTION 20.  This Act takes effect September 1, 1993.
   5-61        SECTION 21.  The importance of this legislation and the
   5-62  crowded condition of the calendars in both houses create an
   5-63  emergency and an imperative public necessity that the
   5-64  constitutional rule requiring bills to be read on three several
   5-65  days in each house be suspended, and this rule is hereby suspended.
   5-66                               * * * * *
   5-67                                                         Austin,
   5-68  Texas
   5-69                                                         May 20, 1993
   5-70  Hon. Bob Bullock
    6-1  President of the Senate
    6-2  Sir:
    6-3  We, your Committee on Intergovernmental Relations to which was
    6-4  referred H.B. No. 1185, have had the same under consideration, and
    6-5  I am instructed to report it back to the Senate with the
    6-6  recommendation that it do not pass, but that the Committee
    6-7  Substitute adopted in lieu thereof do pass and be printed.
    6-8                                                         Armbrister,
    6-9  Chairman
   6-10                               * * * * *
   6-11                               WITNESSES
   6-12                                                  FOR   AGAINST  ON
   6-13  ___________________________________________________________________
   6-14  Name:  Donald Lee                                x
   6-15  Representing:  Harris Co. Judge Jon Lindsay
   6-16  City:  Houston
   6-17  -------------------------------------------------------------------
   6-18  Name:  Joe Paniagua                              x
   6-19  Representing:  City of Fort Worth
   6-20  City:  Fort Worth
   6-21  -------------------------------------------------------------------
   6-22  Name:  Barbara Stephen                           x
   6-23  Representing:  Collin County
   6-24  City:  McKinney
   6-25  -------------------------------------------------------------------
   6-26  Name:  Steve Stagner                             x
   6-27  Representing:  Consulting
   6-28  City:  Austin
   6-29  -------------------------------------------------------------------
   6-30  Name:  Jim Ray                                   x
   6-31  Representing:  Councils of Governments
   6-32  City:  Austin
   6-33  -------------------------------------------------------------------
   6-34  Name:  Karen Kennard                                           x
   6-35  Representing:  TML
   6-36  City:  Austin
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