IMF H.B. 3042 75(R)BILL ANALYSIS STATE AFFAIRS H.B. 3042 By: Turner, Sylvester 5-9-97 Committee Report (Amended) BACKGROUND There are numerous non profit organizations that coordinate the purchasing needs of numerous local governments. This gives local governments the ability to increase their purchasing power and thereby earn volume discounts on goods and services that they would normally have to purchase at a higher price. PURPOSE As proposed, H.B. 3042 would allow local governments to participate in partnerships with cooperative organizations and other governmental entities to increase their buying power. The bill would waive competitive bidding requirements for government entities that participate in these cooperative purchasing programs. 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 271.102 of the Local Government Code by adding subsection (d) that would allow a local government to be exempted from seeking competitive bids if that local government procures its goods and services under a contract with a non-profit organization that functions as a cooperative for numerous local governments. SECTION 2. Amends Chapter 2252 of the Government Code by adding Subchapter D as follows: Section 2252.081 defines "Cooperative organizations" and "Governmental entity." Section 2252.082(a) allows a governmental entity to participate in a cooperative purchasing program with another governmental entity or cooperative organization. Section 2252.082(b) allows a governmental entity participating in a cooperative purchasing program to sign an agreement with another participating governmental entity or cooperative organization that: -designates the person on behalf of the governmental entity in regards to the program; -determines how payments to another governmental entity, cooperative organization, or vendor will be made; and -sets governmental entity's responsibility for vendor compliance with the program. Section 2252.083 allows a local government to be exempted from seeking competitive bids if that local government procures its goods and services under a contract with a nonprofit organization that functions as a cooperative for numerous local governments. SECTION 3. Emergency clause. EXPLANATION OF AMENDMENT Committee amendment no. 1 is intended to clarify and more narrowly define the kind of non-profit organization that will be performing cooperative purchasing with state and local governments. As outlined in the amendment, the non-profit organizations who will be authorized to perform this function are those that only procure computers or telecommunications systems, are set up to serve as an educational resource for local governments and are chartered to serve government and its policies and must be governed and controlled by elected and appointed local governmental officials. These non-profits must also abide by certain competitive bidding guidelines utilized by the state.