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.