LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE 75th Regular Session May 27, 1997 TO: Honorable Bob Bullock IN RE: Senate Bill No. 1752, As Passed 2nd House Lieutenant Governor Armbrister Senate Austin, Texas FROM: John Keel, Director In response to your request for a Fiscal Note on SB1752 ( 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 detemined the following: Biennial Net Impact to General Revenue Funds by SB1752-As Passed 2nd House Implementing the provisions of the bill would result in a net impact of $0 to General Revenue Related Funds through the biennium ending August 31, 1999. Fiscal Analysis The bill would require state agencies and institutions of higher education to use the "best value" approach when evaluating contractor bids, and to provide a process for barring contractors from contracting with the state under certain circumstances. The bill would also increase the threshold for requiring competitive bids from $1,000 to $2,000 and allow the General Services Commission (GSC) to delegate additional purchasing authority to state agencies. The bill would allow a state agency to purchase goods and services from a vendor who is not on the bidders list if the purchase price does not exceed $5,000. The bill would require the GSC to establish a training and continuing education program for certifying state agency purchasing staff. The cost of providing this training program would be provided on a full cost recovery basis. The bill would also amend Section 447.008 of the Government Code relating to the authority of the state energy management center at the General Services Commission (GSC). The bill would authorize the center to negotiate rates for state agency electric services. Electric service contracts could be negotiated by the center for each state agency, or under a single contract on behalf of several state agencies. The Office of the Attorney General (OAG) would be empowered to represent the energy management center as an intervenor in Public Utility Commission proceedings related to electric utility industry deregulation. The OAG and the center would cooperate in monitoring efforts to deregulate the electric utility industry and in reporting on the ways deregulation would affect state government as a purchaser of electricity. The energy management center would be directed to analyze electricity rates and usage to determine ways in which the state could lower its utility costs. The PUC and other state agencies would be required to assist the center in obtaining the information it needs to perform this analysis. The bill would amend the Government Code relating to the Department of Public Safety's authority to make certain expenditures, and to require the General Services Commission and the Department of Information Resources to develop a technology access clause to be included in all state contracts. The bill would also amend the Public Utility Regulatory Act relating to fees charged for electronic access to certain information. Methodolgy The expanded training program for state agency purchasing staff required by the bill would result in additional costs based on an assessment of workload by the GSC. These costs would be recovered by the GSC in the form of interagency contracts. However, the cost to each agency is not expected to be significant. The purchase of products and services having the "best value" could result in savings to the state over the long run due to increased reliability, durability, and quality of the products and services purchased. The General Services Commission anticipates that it would need the following four additional FTEs to negotiate electric service contracts and electric rates for state agency electric services: a Director of Programs II, an Attorney V, an Administrative Technician I, and a Utility Specialist I. The Commission expects to be able to use oil overcharge money, which is paid out of a General Revenue dedicated account, for these functions. Five Year Impact: Fiscal Year Probable Change in Number Savings/(Cost) of State from Oil Employees from Overcharge FY 1997 Account/ GR-Dedicated 5005 1998 ($200,593) 4.0 1998 (200,593) 4.0 2000 (200,593) 4.0 2001 (200,593) 4.0 2002 (200,593) 4.0 The bill would not require units of local government to participate in the training programs offered by the GSC. However, local governments choosing to receive such training would be charged on a cost recovery basis by the GSC. Source: Agencies: 720 University of Texas System Administration 601 Department of Transportation 696 Department of Criminal Justice 303 General Services Commission 304 Comptroller of Public Accounts 473 Public Utility Commission of Texas 302 Office of the Attorney General LBB Staff: JK ,JD ,RN