By Zaffirini                                    S.B. No. 1066

      75R3330 JRD-D                           

                                A BILL TO BE ENTITLED

 1-1                                   AN ACT

 1-2     relating to purchasing practices by health and human services

 1-3     agencies, by certain other agencies with programs related to health

 1-4     or human services, and by certain public and private local

 1-5     providers of health or human services.

 1-6           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-7           SECTION 1.  Subchapter C, Chapter 2155, Government Code, is

 1-8     amended by adding Section 2155.144 to read as follows:

 1-9           Sec. 2155.144.  PURCHASES BY HEALTH AND HUMAN SERVICES

1-10     AGENCIES, ATTORNEY GENERAL, AND WORKERS' COMPENSATION COMMISSION.

1-11     (a)  This section applies to the Health and Human Services

1-12     Commission, to each health and human services agency, to the office

1-13     of the attorney general, and to the Texas Workers' Compensation

1-14     Commission.

1-15           (b)  An agency to which this section applies is delegated the

1-16     authority to purchase its goods and services, except as provided by

1-17     this section.

1-18           (c)  An agency to which this section applies may acquire

1-19     goods or services by the method that provides the best value to the

1-20     agency, including:

1-21                 (1)  competitive bidding;

1-22                 (2)  competitive sealed proposals;

1-23                 (3)  a catalogue purchase;

1-24                 (4)  a group purchasing program; or

 2-1                 (5)  an open market contract.

 2-2           (d)  In determining the best value to the agency, the agency

 2-3     shall consider:

 2-4                 (1)  the purchase price;

 2-5                 (2)  the reputation of the vendor and of the vendor's

 2-6     goods or services;

 2-7                 (3)  the quality of the vendor's goods or services;

 2-8                 (4)  the extent to which the goods or services meet the

 2-9     agency's needs;

2-10                 (5)  the vendor's past relationship with the agency;

2-11                 (6)  the impact on the ability of the agency to comply

2-12     with laws and rules relating to historically underutilized

2-13     businesses;

2-14                 (7)  the total long-term cost to the agency of

2-15     acquiring the vendor's goods or services; and

2-16                 (8)  any other relevant factor that a private business

2-17     entity would consider in selecting a vendor.

2-18           (e)  The state auditor may audit the agency's purchases of

2-19     goods and services.

2-20           (f)  The agency may adopt rules and procedures for the

2-21     acquisition of goods and services.

2-22           (g)  The Health and Human Services Commission shall adopt

2-23     rules and procedures for the acquisition of goods and services that

2-24     apply to all health and human services agencies, and the rules of

2-25     those agencies must be consistent with the rules of the Health and

2-26     Human Services Commission.

2-27           (h)  The Health and Human Services Commission shall

 3-1     coordinate the purchasing practices of all health and human

 3-2     services agencies and encourage those agencies to use efficient

 3-3     procurement practices such as combining maintenance contracts into

 3-4     one contract and obtaining prompt payment discounts. The  Health

 3-5     and Human Services Commission may transfer the purchasing functions

 3-6     of a health and human services agency to another appropriate state

 3-7     agency if it determines that transferring those functions would be

 3-8     advantageous to the state. Other state agencies and institutions

 3-9     with experience in purchasing goods and services using the

3-10     procedures allowed under Subsections (c) and (d) shall on request

3-11     assist the Health and Human Services Commission to perform its

3-12     functions under this section.

3-13           (i)  To the extent of any conflict, this section prevails

3-14     over any other law relating to the purchasing of goods and services

3-15     except a law relating to contracting with historically

3-16     underutilized businesses.

3-17           (j)  In this section, "health and human services agency" has

3-18     the meaning assigned by Section 531.001.

3-19           SECTION 2.  Subchapter B, Chapter 32, Human Resources Code,

3-20     is amended by adding Sections 32.043 and 32.044 to read as follows:

3-21           Sec. 32.043.  PURCHASING RULES FOR PUBLIC DISPROPORTIONATE

3-22     SHARE HOSPITALS.  (a)  A public hospital that is designated as a

3-23     disproportionate share hospital during a fiscal year may purchase

3-24     goods and services in accordance with this section during the

3-25     succeeding fiscal year.  A purchase of goods or services made in

3-26     accordance with this section is considered to satisfy any state law

3-27     requiring purchases by competitive bidding or competitive

 4-1     proposals.

 4-2           (b)  The public hospital may acquire goods or services by the

 4-3     method that provides the best value to the public hospital,

 4-4     including:

 4-5                 (1)  competitive bidding;

 4-6                 (2)  competitive sealed proposals;

 4-7                 (3)  a catalogue purchase;

 4-8                 (4)  a group purchasing program; or

 4-9                 (5)  an open market contract.

4-10           (c)  In determining the best value to the public hospital,

4-11     the public hospital shall consider:

4-12                 (1)  the purchase price;

4-13                 (2)  the reputation of the vendor and of the vendor's

4-14     goods or services;

4-15                 (3)  the quality of the vendor's goods or services;

4-16                 (4)  the extent to which the goods or services meet the

4-17     public hospital's needs;

4-18                 (5)  the vendor's past relationship with the public

4-19     hospital;

4-20                 (6)  the impact on the ability of the public hospital

4-21     to comply with any applicable laws and rules relating to

4-22     historically underutilized businesses;

4-23                 (7)  the total long-term cost to the public hospital of

4-24     acquiring the vendor's goods or services; and

4-25                 (8)  any other relevant factor that a private business

4-26     entity would consider in selecting a vendor.

4-27           (d)  The state auditor or the department may audit the public

 5-1     hospital's purchases of goods and services to the extent that state

 5-2     money or federal money appropriated by the state is used to

 5-3     purchase the goods and services.

 5-4           (e)  The public hospital may adopt rules and procedures for

 5-5     the acquisition of goods and services.

 5-6           Sec. 32.044.  GROUP PURCHASING FOR DISPROPORTIONATE SHARE

 5-7     HOSPITALS.  (a)  A public or private hospital that is designated as

 5-8     a disproportionate share hospital during a fiscal year may purchase

 5-9     goods and services in accordance with this section during the

5-10     succeeding fiscal year. A purchase of goods or services made in

5-11     accordance with this section is considered to satisfy any state law

5-12     requiring purchases by competitive bidding or competitive

5-13     proposals.

5-14           (b)  A state or local governmental entity may allow the

5-15     public or private hospital to purchase goods or services by

5-16     participating in one or more of the entity's contracts for the

5-17     purchase of goods or services.

5-18           (c)  The public or private hospital may purchase goods or

5-19     services in accordance with this section through a group purchasing

5-20     program that offers discount prices to hospitals or other providers

5-21     of health care services.

5-22           (d)  The department with the assistance of the General

5-23     Services Commission shall adopt rules that allow the public or

5-24     private hospital to make purchases through group purchasing

5-25     programs except when the department has reason to believe that a

5-26     better value is available through another purchasing method.

5-27           (e)  This section applies to private hospitals only to the

 6-1     extent it authorizes private hospitals to participate in purchasing

 6-2     contracts with governmental entities or to satisfy any state law

 6-3     that may require goods and services the hospital purchases to be

 6-4     competitively procured. This section does not impose new purchasing

 6-5     requirements on a private hospital, except to the extent that the

 6-6     private hospital agrees to be bound by the terms of a contract that

 6-7     is authorized by this section and that it chooses to enter. This

 6-8     section does not affect any explicit or implicit authority that a

 6-9     private hospital has under other law to participate in a group

6-10     purchasing program or to participate in a purchasing contract with

6-11     a public entity.

6-12           SECTION 3.  Sections 12.052(a) and (b), Health and Safety

6-13     Code, are amended to read as follows:

6-14           (a)  The expenditure of funds received by local units of

6-15     government from the department is governed by Chapter 783,

6-16     Government Code, [the Uniform Grant and Contract Management Act of

6-17     1981 (Article  4413(32g), Vernon's Texas Civil Statutes)] and the

6-18     rules adopted under that law, except as provided by Section 12.055

6-19     [Act].

6-20           (b)  The expenditure of funds received by other state

6-21     agencies from the department is governed by Subtitle D, Title 10,

6-22     Government Code, [the State Purchasing and General Services Act

6-23     (Article 601b, Vernon's Texas Civil Statutes)] and the rules

6-24     adopted under that law, except as provided by Section 12.055 [Act].

6-25           SECTION 4.  Subchapter E, Chapter 12, Health and Safety Code,

6-26     is amended by adding Sections 12.055 and 12.056 to read as follows:

6-27           Sec. 12.055.  CERTAIN PURCHASES MADE WITH DEPARTMENT FUNDS.

 7-1     (a)  A state agency or local unit of government that expends funds

 7-2     received from the department for the purchase of goods and services

 7-3     may satisfy the requirements of Section 12.052 or of another state

 7-4     law requiring purchases by competitive bidding or competitive

 7-5     sealed proposals by purchasing with those funds in accordance with

 7-6     Section 12.056 or in accordance with:

 7-7                 (1)  Section 2155.144, Government Code, if the entity

 7-8     is a state agency subject to that law;

 7-9                 (2)  Section 32.043 or 32.044, Human Resources Code, if

7-10     the entity is a public hospital subject to those laws; or

7-11                 (3)  this section, if the entity is not covered by

7-12     Subdivision (1) or (2).

7-13           (b)  A state agency or local unit of government under

7-14     Subsection (a)(3) may acquire goods or services by the method that

7-15     provides the best value to the state agency or local unit of

7-16     government, including:

7-17                 (1)  competitive bidding;

7-18                 (2)  competitive sealed proposals;

7-19                 (3)  a catalogue purchase;

7-20                 (4)  a group purchasing program; or

7-21                 (5)  an open market contract.

7-22           (c)  In determining the best value to the state agency or

7-23     local unit of government, the state agency or local unit of

7-24     government shall consider:

7-25                 (1)  the purchase price;

7-26                 (2)  the reputation of the vendor and of the vendor's

7-27     goods or services;

 8-1                 (3)  the quality of the vendor's goods or services;

 8-2                 (4)  the extent to which the goods or services meet the

 8-3     state agency's or local unit of government's needs;

 8-4                 (5)  the vendor's past relationship with the state

 8-5     agency or local unit of government;

 8-6                 (6)  the impact on the ability of the state agency or

 8-7     local unit of government to comply with any applicable laws and

 8-8     rules relating to historically underutilized businesses;

 8-9                 (7)  the total long-term cost to the state agency or

8-10     local unit of government of acquiring the vendor's goods or

8-11     services; and

8-12                 (8)  any other relevant factor that a private business

8-13     entity would consider in selecting a vendor.

8-14           (d)  The state auditor or the department may audit the state

8-15     agency's or local unit of government's purchases of goods and

8-16     services under this section.

8-17           (e)  The state agency or local unit of government may adopt

8-18     rules and procedures for the acquisition of goods and services.

8-19           Sec. 12.056.  PARTICIPATION IN DEPARTMENT PURCHASING

8-20     CONTRACTS OR GROUP PURCHASING PROGRAM.  The department may allow a

8-21     state agency, local unit of government, or private entity that

8-22     expends funds received by the department to purchase goods or

8-23     services using those funds by participating in:

8-24                 (1)  a contract the department has made to purchase

8-25     goods or services; or

8-26                 (2)  a group purchasing program established or

8-27     designated by the department that offers discounts to providers of

 9-1     health services.

 9-2           SECTION 5.  Subchapter A, Chapter 533, Health and Safety

 9-3     Code, is amended by adding Sections 533.016 and 533.017 to read as

 9-4     follows:

 9-5           Sec. 533.016.  CERTAIN PURCHASES OF GOODS AND SERVICES BY

 9-6     SERVICE PROVIDERS.  (a)  A state agency, local agency, local mental

 9-7     health authority, or local mental retardation authority that

 9-8     expends public money to purchase goods or services in connection

 9-9     with providing or coordinating the provision of mental health or

9-10     mental retardation services may satisfy the requirements of any

9-11     state law requiring purchases by competitive bidding or competitive

9-12     sealed proposals by purchasing with the public money in accordance

9-13     with Section 533.017 or in accordance with:

9-14                 (1)  Section 2155.144, Government Code, if the entity

9-15     is a state agency subject to that law;

9-16                 (2)  Section 32.043 or 32.044, Human Resources Code, if

9-17     the entity is a public hospital subject to those laws; or

9-18                 (3)  this section, if the entity is not covered by

9-19     Subdivision (1) or (2).

9-20           (b)  An agency or authority under Subsection (a)(3) may

9-21     acquire goods or services by the method that provides the best

9-22     value to the agency or authority, including:

9-23                 (1)  competitive bidding;

9-24                 (2)  competitive sealed proposals;

9-25                 (3)  a catalogue purchase;

9-26                 (4)  a group purchasing program; or

9-27                 (5)  an open market contract.

 10-1          (c)  In determining the best value to the agency or

 10-2    authority, the agency or authority shall consider:

 10-3                (1)  the purchase price;

 10-4                (2)  the reputation of the vendor and of the vendor's

 10-5    goods or services;

 10-6                (3)  the quality of the vendor's goods or services;

 10-7                (4)  the extent to which the goods or services meet the

 10-8    agency's or authority's needs;

 10-9                (5)  the vendor's past relationship with the agency or

10-10    authority;

10-11                (6)  the impact on the ability of the agency or

10-12    authority to comply with any applicable laws and rules relating to

10-13    historically underutilized businesses;

10-14                (7)  the total long-term cost to the agency or

10-15    authority of acquiring the vendor's goods or services; and

10-16                (8)  any other relevant factor that a private business

10-17    entity would consider in selecting a vendor.

10-18          (d)  The state auditor or the department may audit the

10-19    agency's or authority's purchases of goods and services under this

10-20    section to the extent state money or federal money appropriated by

10-21    the state is used to make the purchases.

10-22          (e)  The agency or authority may adopt rules and procedures

10-23    for the acquisition of goods and services.

10-24          Sec. 533.017.  PARTICIPATION IN DEPARTMENT PURCHASING

10-25    CONTRACTS OR GROUP PURCHASING PROGRAM.  The department may allow a

10-26    state agency, local agency, local mental health authority, or local

10-27    mental retardation authority that expends public money to purchase

 11-1    goods or services in connection with providing or coordinating the

 11-2    provision of mental health or mental retardation services to

 11-3    purchase goods or services with the public money by participating

 11-4    in:

 11-5                (1)  a contract the department has made to purchase

 11-6    goods or services; or

 11-7                (2)  a group purchasing program established or

 11-8    designated by the department that offers discounts to providers of

 11-9    mental health or mental retardation services.

11-10          SECTION 6.  This Act takes effect September 1, 1997.

11-11          SECTION 7.  The importance of this legislation and the

11-12    crowded condition of the calendars in both houses create an

11-13    emergency and an imperative public necessity that the

11-14    constitutional rule requiring bills to be read on three several

11-15    days in each house be suspended, and this rule is hereby suspended.