LEGISLATIVE BUDGET BOARD
                          Austin, Texas

                           FISCAL NOTE
                       74th Regular Session

                          April 24, 1995



 TO:     Honorable Ken Armbrister, Chair        IN RE:  Senate BillNo. 1321
         Committee on State Affairs                     By: Armbrister
         Senate
         Austin, Texas






FROM: John Keel, Director

In response to your request for a Fiscal Note on Senate Bill No.
1321 (Relating to the purchase of goods and services by the state
and to purchasing services provided by the state to local
governments.) this office has determined the following:

The bill would make no appropriation but could provide the legal
basis for an appropriation of funds to implement the provisions
of the bill.

The bill would make numerous revisions to Article 601b, Vernon's
Texas Civil Statutes, specifically to the General Services
Commission's (GSC)  purchasing system.

The General Services Commission could charge fees to recover
costs for providing purchasing assistance to state agencies which
have been delegated purchasing authority by the GSC or by
statute.   GSC estimates that recovered costs would be
negligible.

GSC would be required to establish and manage a central
electronic procurement database which would contain information
about vendors, products, and purchasing contracts.  The database
would be available to all state agencies and political
subdivisions through the procurement marketplace system.

GSC would be required to establish and administer a training and
certification program for state agency purchasing personnel,
including a continuing education program.   The Commission would
be required to set and collect fees to recover costs for the
program.  




 GSC would be required to establish purchasing partnerships
between agencies and identify agencies where partnerships could
be developed.  The partnership would allow agencies with
certified purchasers to make certain purchases for other state
agencies.

The bill would increase the threshold at which GSC may delegate
purchasing authority to state agencies from $5,000 to $25,000 and
increase the threshold for non-competitive bid requirements from
$1,000 to $2,500.

The bill would require the GSC to refer any suspected criminal
violations by vendors in reporting required information to the
appropriate legal authorities for investigation and prosecution.

The bill would establish standards for determining the "best
value" in making purchases for the state.

The bill would allow the GSC to invite and accept bids from
vendors electronically or by fax once information capabilities of
the state and vendor community are sufficient.

The bill would establish the Advisory Committee on Procurement
which would recommend improvements to purchasing procedures, and
review and comment on finding and recommendations by state
auditors on purchasing matters.

The bill would establish the Vendor Advisory Committee to
represent the vendor community, provide information to vendors,
and obtain vendor input on state procurement practices.

The bill would require GSC to establish an electronic bulletin
board posting of procurement notices for all purchasing exceeding
$25,000.

The bill would require GSC to establish an electronic procurement
marketplace which would serve as a central source of procurement
information for state agencies and political subdivisions.  Fees
could be charged to political subdivisions to recover the cost
the service.

The bill would require GSC to establish an electronic commerce
network to allow state agencies to make electronic purchases with
vendors and to electronically forward purchase orders to GSC.

In addition, the bill would require the Council on Competitive
Government to study the materials management functions of state
agencies and determine operational efficiencies.

The bill would require the state auditor and the advisory
committee on procurement to study and determine appropriate
salaries and career paths for certified state purchasers.

The bill would require the Legislative Budget Board and the   




Governor's Office of Budget and Planning to study ways to gather
planned state procurement information as part of the state's
appropriation process and ways to increase the state's buying
power.

The bill would require the State Auditor to periodically conduct
compliance audits of purchasing practices of state agencies and
institutions of higher education, including compliance with state
laws regarding HUBs.  The state auditor would be required to
consult with the GSC and comptroller in planning the audits.

The bill would require internal auditors of state agencies to
frequently audit state agency purchasing practices and report the
findings to the agency administrator.  The administrator would be
required to report the results of the audit and any
investigations and an administrator's response to the exceptions
or issues raised to the state auditor, GSC and Comptroller.

The bill would require the Comptroller to automatically submit
duly owed interest payments to vendors with amounts due for goods
and services.  This section would take effect on September 1,
1997.

The bill would repeal Section 2251.041, Government Code effective
September 1, 1997, which requires a vendor to petition the state
for payment of duly owed interest.

The Act would take effect on September 1, 1995, unless provided
otherwise.

Although provisions of this bill do have potential fiscal
implications for the State Auditor, no estimates are available at
this time.

The probable fiscal implication of implementing the provisions of
the bill during each of the first  five years following passage
is estimated as follows: