HBA-TYH S.B. 507 76(R)    BILL ANALYSIS


Office of House Bill AnalysisS.B. 507
By: Duncan
Urban Affairs
4/28/1999
Engrossed



BACKGROUND AND PURPOSE 

Current state law requires municipalities with fewer than 100,000 residents
to comply with specified procedures for competitive sealed bidding before
entering into an insurance contract requiring the expenditure of more than
$5,000.  State law also restricts municipalities' use of competitive sealed
proposal procedures except for high technology procurement or for insurance
purchases when the city is populated by more than 100,000 residents.
Recently, insurance plans, such as health insurance plans, have become more
complex and sophisticated, thus making it important for cities to consider
certain additional technical factors in addition to a plan's cost. 

A competitive sealed proposal procedure may enhance a city's ability to
negotiate affordable contracts.  S.B. 507 reduces the minimum population
requirement from 100,000 to 75,000 to establish a municipality's
eligibility to solicit insurance contracts through competitive sealed
proposal procedures. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Sections 252.021(b) and (c), Local Government Code, to
authorize a municipality with a population of less than 75,000, rather than
100,000, to enter into a contract for insurance that requires an
expenditure of more than $5,000 from one or more municipal funds, if the
municipality complies with the procedure prescribed by this chapter
(Purchasing and Contracting Authority of Municipalities) for competitive
sealed bidding.  Authorizes a municipality to use the competitive sealed
proposal procedure only for high technology procurement or, in a
municipality with a population of 75,000 or more, rather than in excess of
100,000, for the purchase of insurance. 

SECTION 2.  Makes application of this Act prospective.

SECTION 3.  Emergency clause.
  Effective date: upon passage.