By Farrar                                             H.B. No. 3103
       74R8035 PAM-F
                                 A BILL TO BE ENTITLED
    1-1                                AN ACT
    1-2  relating to procurement of public improvements at the least cost;
    1-3  providing penalties.
    1-4        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
    1-5        SECTION 1.  (a)  This Act creates a least cost review program
    1-6  to assist governmental entities in determining the least cost of
    1-7  public improvements performed by a governmental entity within the
    1-8  state.
    1-9        (b)  This subchapter is adopted to ensure that public
   1-10  improvements are procured at the least cost.
   1-11        SECTION 2.  Chapter 271, Local Government Code, is amended by
   1-12  adding Subchapter F to read as follows:
   1-13               SUBCHAPTER F.  LEAST COST REVIEW PROGRAM
   1-14        Sec. 271.101.  DEFINITIONS.  In this subchapter:
   1-15              (1)  "Component purchases" means purchases of the
   1-16  component parts of an item that in normal purchasing practices
   1-17  would be purchased in one purchase.
   1-18              (2)  "Cost comparison statement" means a statement by a
   1-19  governmental entity that compares the cost of purchasing a public
   1-20  improvement with the cost of providing the improvement by the
   1-21  governmental entity.
   1-22              (3)  "Governmental entity" means:
   1-23                    (A)  a county with a population of 50,000 or
   1-24  more;
    2-1                    (B)  a municipality;
    2-2                    (C)  a common or independent school district;
    2-3                    (D)  a hospital district or authority;
    2-4                    (E)  a housing authority;
    2-5                    (F)  a water district or authority;
    2-6                    (G)  a utility district or authority;
    2-7                    (H)  a road utility district; or
    2-8                    (I)  an agency or instrumentality of a
    2-9  governmental entity described by this subdivision.
   2-10              (4)  "In-house cost estimate" means a report by a
   2-11  governmental entity that contains the computations of probable cost
   2-12  to the governmental entity of providing a public improvement using
   2-13  the personnel, equipment, or facilities of the governmental entity.
   2-14              (5)  "Public improvement" means the construction,
   2-15  alteration, repair, or renovation, including the materials,
   2-16  machinery, fixtures, tools, or labor incorporated into or consumed
   2-17  in the prosecution of the work, of a facility, including a
   2-18  building, structure, site improvement, road, street, highway,
   2-19  bridge, drainage structure, storm sewer, sanitary sewer, wastewater
   2-20  treatment or pumping facility, water main, and water storage
   2-21  facility, owned and operated by a governmental entity.
   2-22              (6)  "Separate purchases" means purchases, made
   2-23  separately, of items that in normal purchasing practices would be
   2-24  purchased in one purchase.
   2-25              (7)  "Sequential purchases" means periodic purchases of
   2-26  items that in normal purchasing practices would be purchased in one
   2-27  purchase.
    3-1        Sec. 271.102.  LEAST COST REVIEW REQUIRED.  A governmental
    3-2  entity that performs public improvements subject to this subchapter
    3-3  shall participate in a least cost review program and shall apply
    3-4  the policies and requirements established under this subchapter.
    3-5        Sec. 271.103. EXEMPT PURCHASES.  This subchapter does not
    3-6  apply to a purchase by a governmental entity, if the purchase is:
    3-7              (1)  exempt from competitive bidding under Subchapter
    3-8  A, Chapter 2254, Government Code;
    3-9              (2)  for an amount less than $10,000 including all
   3-10  other component purchases, separate purchases, and sequential
   3-11  purchases by the governmental entity;
   3-12              (3)  for a public improvement necessitated by public
   3-13  calamity in which the use of personnel, equipment, or facilities of
   3-14  the governmental entity will more expediently relieve the needs or
   3-15  preserve the property of its citizens; or
   3-16              (4)  a public improvement purchased under the
   3-17  competitive bidding requirements of Subchapter B.
   3-18        Sec. 271.104.  LEAST COST REVIEW.  (a)  If a governmental
   3-19  entity proposes to construct nonexempt public improvements by use
   3-20  of personnel, equipment, or facilities of the governmental entity,
   3-21  the governmental entity shall submit, before the 30th day before
   3-22  the date of the adoption of its annual budget, a least cost review
   3-23  for consideration and approval at a public meeting of the governing
   3-24  body of the governmental entity.
   3-25        (b)  Before the 14th day before the public meeting, the
   3-26  governmental entity shall furnish to any citizen in the
   3-27  jurisdictional limits of the governmental entity a copy of the
    4-1  least cost review if the citizen pays a reasonable fee to reimburse
    4-2  the governmental entity for copying costs.
    4-3        (c)  The least cost review shall contain the following
    4-4  elements:
    4-5              (1)  a list of every nonexempt public improvement to be
    4-6  provided during the budget year by the use of the personnel,
    4-7  equipment, or facilities of the governmental entity;
    4-8              (2)  an estimate of the quantities for each
    4-9  classification of the work in each nonexempt public improvement,
   4-10  according to the classifications normally used on competitively bid
   4-11  public improvements;
   4-12              (3)  a cost estimate of probable costs for providing
   4-13  each nonexempt public improvement by competitive bid, as determined
   4-14  by multiplying the quantities of each classification of the work by
   4-15  unit costs established by comparable bid data in the locale of the
   4-16  governmental entity;
   4-17              (4)  an in-house cost estimate of probable costs of
   4-18  providing each nonexempt public improvement using the personnel,
   4-19  equipment, or facilities of the governmental entity, including all
   4-20  direct and indirect costs of labor, materials, administration,
   4-21  investment, and maintenance of equipment, under the cost accounting
   4-22  procedures and instructions relating to in-house cost estimates as
   4-23  provided by the State Council on Competitive Government under
   4-24  Article 15, State Purchasing and General Services Act (Article
   4-25  601b, Vernon's Texas Civil Statutes);
   4-26              (5)  a cost comparison statement for each nonexempt
   4-27  public improvement listed in the least cost review; and
    5-1              (6)  a determination as to whether the standard of
    5-2  quality of the public improvement using personnel, equipment, or
    5-3  facilities of the governmental entity will be the same as if the
    5-4  public improvement were purchased pursuant to competitive bidding
    5-5  requirements of Subchapter B.
    5-6        Sec. 271.105.  REDUCTION OF COSTS.  (a)  Except as provided
    5-7  by Subsection (b), a governmental entity shall purchase a public
    5-8  improvement by competitive bid if the least cost review for the
    5-9  public improvement by the governmental entity indicates that the
   5-10  least cost to the entity would be by purchase under the competitive
   5-11  bidding requirements of Subchapter B.
   5-12        (b)  A governmental entity may purchase a public improvement
   5-13  without complying with the competitive bid requirements of
   5-14  Subchapter B if:
   5-15              (1)  the additional cost is less than 10 percent; and
   5-16              (2)  the governing body of the governmental entity
   5-17  passes a resolution specifically describing:
   5-18                    (A)  the non-cost advantages of providing the
   5-19  public improvement using personnel, equipment, or facilities of the
   5-20  governmental entity; and
   5-21                    (B)  a proposal for reducing costs of the
   5-22  personnel, equipment, or facilities used in the public improvement
   5-23  so that the total costs are reduced to the costs of a competitively
   5-24  bid public improvement.
   5-25        Sec. 271.106.  MAINTENANCE OF COST RECORDS.  For each public
   5-26  improvement purchased using the personnel, equipment, or facilities
   5-27  of a governmental entity, the governmental entity shall maintain
    6-1  and preserve as a public record a true and accurate account of all
    6-2  direct and indirect actual costs of labor, materials,
    6-3  administration, investment, and maintenance of equipment under the
    6-4  accounting procedures and instructions as provided by the State
    6-5  Council on Competitive Government under Article 15, State
    6-6  Purchasing and General Services Act (Article 601b, Vernon's Texas
    6-7  Civil Statutes).
    6-8        Sec. 271.107.  CRIMINAL PENALTIES.  (a)  An officer or
    6-9  employee of a governmental entity commits an offense if the officer
   6-10  or employee intentionally or knowingly:
   6-11              (1)  makes or authorizes separate, sequential, or
   6-12  component purchases to avoid requirements of a least cost review
   6-13  described by Section 271.104; or
   6-14              (2)  violates the least cost review requirements of
   6-15  Section 271.104.
   6-16        (b)  An offense under Subsection (a) is a Class B
   6-17  misdemeanor.
   6-18        (c)  An officer or employee of a governmental entity who
   6-19  intentionally or knowingly violates this subchapter, other than by
   6-20  conduct described in Subsection (a) or (b) commits an offense that
   6-21  is a Class C misdemeanor.
   6-22        Sec. 271.108.  REMOVAL; INELIGIBILITY.  (a)  The final
   6-23  conviction of an officer or employee of a governmental entity for
   6-24  an offense under Section 271.107(a) results in the immediate
   6-25  removal from office or employment of that person.
   6-26        (b)  For four years after the date of the final conviction,
   6-27  the removed officer or employee is ineligible:
    7-1              (1)  to be a candidate for or to be appointed or
    7-2  elected to a public office in this state;
    7-3              (2)  to be employed by the governmental entity the
    7-4  person served when the offense occurred; and
    7-5              (3)  to receive any compensation through a contract
    7-6  with that governmental entity.
    7-7        (c)  This section does not prohibit the payment of retirement
    7-8  or workers' compensation benefits to the removed officer or
    7-9  employee.
   7-10        Sec. 271.109.  INJUNCTIVE RELIEF.  A citizen in the
   7-11  jurisdictional limits of a governmental entity may enjoin the
   7-12  governmental entity from acting in violation of this subchapter.
   7-13        SECTION 3.  The importance of this legislation and the
   7-14  crowded condition of the calendars in both houses create an
   7-15  emergency   and   an   imperative   public   necessity   that   the
   7-16  constitutional rule requiring bills to be read on three several
   7-17  days in each house be suspended, and this rule is hereby suspended.