BILL ANALYSIS


                                                         S.B. 878
                                                         By: West
                                                    State Affairs
                                                          3-21-95
                                       Committee Report (Amended)
BACKGROUND

Currently, no mechanism exists to ensure that each agency is in
compliance with legislation regarding participation in historically
underutilized businesses (HUBs), tracking and monitoring the
utilization of HUBs, and ensuring the accuracy of reported data.

PURPOSE

As proposed, S.B. 878 requires the General Services Commission and
state agencies to develop strategic plans regarding awarding state
purchasing contracts to historically underutilized businesses.

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 1.03, Article 601b, V.T.C.S. (State
Purchasing and General Services Act), by amending Subsections (l)
and (m) and adding Subsections (q)-(s), as follows:

     (l) Requires the General Services Commission (commission) and
     each state agency (agency) to prepare as part of its strategic
     plan under Chapter 2056, Government Code, a plan for
     increasing the entity's use of historically underutilized
     businesses (HUBs) in purchasing and in construction, rather
     than public works, contracting.  Requires the plan to include
     provisions to assist HUBs to achieve the goal of receiving a
     certain percentage of all state contracts; list employees
     responsible for implementing the HUBs provisions of the plan;
     identify, classify, and assist appropriate HUBs to receive a
     certain percentage of the contracts; encourage HUBs to
     participate as subcontractors; divide construction or
     purchases into the smallest reasonable units; ensure that the
     agency establishes realistic delivery schedules; ensure that
     the agency's requisitions contain terms and conditions that
     reflect the agency's actual needs; inform HUBs about
     contracting opportunities; provide HUBs with bonding and
     insurance requirements; and negotiate in good faith with
     interested HUBs, among other provisions.
     
     (m) Requires the commission and each agency to prepare an
     annual report for each fiscal year describing the agency's
     achievements in preparing and implementing the HUB provisions
     of the agency's strategic plan.  Requires the report to be
     filed by the commission and agency, rather than by one or the
     other, yearly by December 9 with the governor, lieutenant
     governor, and speaker of the house, and to be included in the
     financial report the agency submits under Section 2101.011,
     Government Code.
     
     (q) Requires the state auditor (auditor) to audit an agency's
     compliance with the HUB provisions of the strategic plan.
     
     (r) Requires the auditor to report to the commission an agency
     that is not complying or is not making a good faith effort to
     comply with the requirements of Subsection (l) or the HUBs
     provisions of the plan.  Sets forth considerations for the
     auditor to determine whether an agency is making a good faith
     effort.
     
     (s) Authorizes the commission to require an agency to send
     information to the commission that demonstrates whether the
     agency is complying with the requirements of Subsection (l)
     and is taking the actions required under the HUBs provisions
     of the plan.  Authorizes the commission to revoke purchasing
     authority that the commission delegated to the agency if the
     agency is not complying with the HUBs requirements. 
     Authorizes the governor and the Legislative Budget Board to
     consider the revocation of an agency's purchasing authority an
     emergency requiring a transfer from the agency's appropriated
     funds to the commission's appropriated funds of an amount
     equal to the cost the commission will incur in performing the
     purchasing functions.
     
SECTION 2. Effective date: September 1, 1995.

SECTION 3. Emergency clause.