BILL ANALYSIS H.B. 1178 By: Thompson (Ellis) Intergovernmental Relations 04-18-95 Senate Committee Report (Amended) BACKGROUND Cities in Texas are currently required to use the formal competitive sealed bid process when purchasing the multitude of various insurance coverages. Experience with the required sealed bid process leads to the conclusion that cities can better serve the interest of taxpayers by using sealed competitive proposals. Risk management and insurance consultants have advised that it is very difficult to develop specifications for the various coverages that adequately reflect the changes in insurance markets. Cities can acquire the best coverage at the best price with the ability to negotiate coverage limits, deductibles, and exclusions. Texas counties are authorized by current law to use sealed competitive proposals to acquire insurance coverage. PURPOSE As proposed, H.B. 1178 authorizes a municipality to use the competitive sealed proposals for certain purchases. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not grant any additional rulemaking authority to a state officer, institution, or agency. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 252.021, Local Government Code, as follows: (a) Makes a conforming change. (b) Requires a municipality with a population of less than 400,000 to comply with the procedure prescribed by this chapter for competitive sealed bidding before the municipality may enter into a contract for insurance that requires an expenditure of more than $5,000 from one or more municipal funds. (c) Authorizes a municipality to use the competitive sealed proposal procedure only for high technology procurements or, in a municipality with a population in excess of $400,000, the purchase of insurance. SECTION 2. Amends the heading of Section 252.042, Local Government Code, as follows: Sec. 252.042. REQUESTS FOR PROPOSALS FOR CERTAIN PROCUREMENTS. SECTION 3. Emergency clause. Effective date: upon passage.