BWH H.B. 2179 75(R)BILL ANALYSIS COUNTY AFFAIRS H.B. 2179 By: Lewis, Ron 4-10-97 Committee Report (Amended) BACKGROUND Under current law, a loop hole exists that allows counties to avoid complying with competitive bidding requirements when paying for construction or maintenance contracts out of proceeds from anticipation notes. Anticipation notes, like certificates of obligation, are considered debt. They fall under many of the same requirements as bonds and certificates of obligation. When counties contract for construction to be done, it is the taxpayers who bear the burden when initial cost estimates are exceeded. Often, the additional costs are undeterminable due to the fact that the county uses its own employees and the time and money that county employees spend on such projects is not recorded. Closing the loop hole in the law and requiring counties to comply with competitive bidding when using anticipation notes and limiting work by the day will help to keep costs to a minimum and keep county residents informed. PURPOSE The purpose of this bill is to require counties to comply with the competitive bidding requirements in Chapter271 of the Local Government Code, even when financing projects through anticipation notes. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 262.023(b), Local Government Code by making anticipation notes subject to the same competitive bidding requirements as certificates of obligation. SECTION 2. Adds a new Subsection 262.024(e), which states that the Section exempting work performed by the day from the competitive bidding requirements applies only to counties with populations of 100,000 or less. SECTION 3. Amends Section 6, Article 717w, Revised Statutes by adding a new Subsection (h), which requires counties to comply with the competitive bidding requirements in the Local Government Code when a contract is to be paid out of proceeds from anticipation notes. SECTION 4. Effective date. SECTION 5. Applicability of Act only to contracts entered and anticipation notes authorized after effective date. SECTION 6. Emergency clause. EXPLANATION OF AMENDMENTS Committee Amendment No. 1 limits the term for which day labor may be hired to 20 days every 3 months.