BILL ANALYSIS


                                                     C.S.S.B. 406
                                                    By: Zaffirini
                                        Health and Human Services
                                                         04-20-95
                                   Committee Report (Substituted)
BACKGROUND

State government is the Texas health care industry's largest single
customer.  In the upcoming biennium, almost a third of the Texas
budget will be spent on health and human services.  While the
greatest expenditures will be for Medicaid, state employee
insurance, and health care for state prison inmates, a considerable
amount will be spent on smaller programs.

PURPOSE

As proposed, C.S.S.B. 406 requires a state agency to acquire goods
and services in support of the agency's health care program in a
method that provides the greatest volume discount.

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 Article 3, Article 601b, V.T.C.S. (State
Purchasing and General Services Act), by adding Section 3.062, as
follows:

     Sec.  3.062.  HEALTH CARE PURCHASING.  (a) Requires a state
     agency (agency) to acquire goods and services used in support
     of the agency's health care programs by a method that provides
     the greatest volume discount for the goods or service,
     including group purchasing programs, agency purchasing
     consortiums, or competitive sealed proposals.
     
     (b) Authorizes an agency to contract with a medical and
       dental unit to have the unit perform all or part of the
       purchasing functions of the agency or to participate in an
       agency purchasing consortium or group purchasing program
       with the medical or dental unit.
       
       (c) Authorizes the agency to acquire the good or service by
       the most cost-effective method of acquisition available,
       including group purchasing programs, agency purchasing
       consortiums, or competitive sealed proposals if an agency
       determines that it should consider factors in addition to
       volume discounts in acquiring a particular good or service.
       
       (d) Requires an agency to provide appropriate information to
       the General Services Commission (commission) concerning
       acquisitions made by the agency.  Provides that the
       commission's authority does not extend to the acquisition of
       goods and services.
       
       (e) Requires the central administration of the University of
       Texas System (UT System) to develop methods for sharing
       information concerning acquisitions made under this section,
       including methods for sharing information electronically. 
       Authorizes electronic sharing to include posting information
       on acquisitions on the comptroller's state government
       electronic bulletin board.
       
       (f) Requires an agency to collect and maintain information
       as specified by the UT System relating to the agency's
       acquisitions under this section.  Entitles the UT System to
       access to all information collected and maintained under
       this section.
       
       (g) Defines "goods," "group purchasing program," "health
       care program," "medical and dental unit," and "state agency
       purchasing consortium."
       
       (h) Provides that this section does not apply to the state
       Medicaid program.
       
       SECTION 2.   Requires the UT System to report to the 75th Legislature
concerning activities of state agencies under Section 3.062,
Article 601b, V.T.C.S., as added by this Act.

SECTION 3. Emergency clause.
           Effective date: upon passage.