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.