HBA-KDB H.B. 2528 77(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 2528 By: Junell State Affairs 3/21/2001 Introduced BACKGROUND AND PURPOSE The state's purchasing methods and procedures are still largely paper-based, which is time consuming and does not take full advantage of the state's purchasing power. Because of this, local governments, institutions of higher education, and school districts may be unable to realize the purchasing benefits the state could offer. Currently, there is a web-based electronic procurement system at the General Services Commission (GSC) to help alleviate the potential problems caused by a paper-based system. However, there is concern that it needs more flexibility, direction, and focus. House Bill 2528 requires the Department of Information Resources, rather than GSC, to establish and manage the electronic infrastructure of an electronic procurement marketplace and requires GSC to adopt rules specifying the circumstances under which it is advantageous for the state to allow a local government to purchase goods or services under a contract made by another local government or a state agency other than GSC. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that rulemaking authority is expressly delegated to the Department of Information Resources in SECTION 1 (Sections 2177.003 and 2177.004, Government Code) and the General Services Commission in SECTION 1 (Sections 2177.003 and 2177.004, Government Code), in SECTION 2 (Section 2155.079, Government Code), in SECTION 3 (Section 271.084, Local Government Code) and SECTION 4 of this bill. ANALYSIS House Bill 2528 amends the Government Code to modify provisions relating to electronic commerce. The bill authorizes an institution of higher education to participate in the electronic procurement system (Sec. 2177.002). The bill requires the Department of Information Resources (DIR), rather than the General Services Commission (GSC), to establish and manage the electronic infrastructure of an electronic procurement marketplace (marketplace). The bill requires GSC to manage and administer the content of the marketplace and provides that the marketplace must comply with requirements of the electronic computing and data processing center and Texas online. The bill authorizes DIR, in addition to GSC, as appropriate, to enter into contracts with private or public entities to establish or maintain all or part of the databases comprising the marketplace, to the extent feasible, including contracts to procure hardware or software. The bill requires DIR, in addition to GSC, to procure all goods and services related to the marketplace through a competitive selection process appropriate for the good or service being acquired. The bill authorizes DIR, rather than GSC, to adopt rules relating to the design and use of the marketplace that concern the technical requirements of the marketplace. The bill authorizes GSC to adopt rules relating to the use of the marketplace for its intended purpose and requires DIR and GSC to consult in adopting rules relating to the marketplace. The bill authorizes DIR, in addition to GSC, to require information from a state agency for inclusion in the marketplace (Sec. 2177.003). The bill requires DIR to establish and GSC to manage an electronic commerce network (network), to the extent feasible, under which the state's purchasing transactions with vendors can be accomplished electronically by means of facsimile transmissions and on-line transmission of necessary information. The bill authorizes DIR, in addition to GSC, to enter into contracts with one or more public or private entities to establish or support various elements of the network, and requires DIR, in addition to GSC, to procure all goods and services related to the network through the competitive selection process appropriate for the good or service being acquired. The bill authorizes DIR to adopt rules to administer provisions that concern the technical requirements of the network and authorizes GSC to adopt rules to administer provisions relating to the use of the network for its intended purpose. The bill requires DIR and GSC to consult in adopting rules relating to the network (Sec. 2177.004). The bill authorizes a local government or participating institution of higher education to send to GSC for posting on the network information on each procurement contract the value of which will exceed the amount of the agency's delegated purchasing authority. The bill requires a local government and a participating institution of higher education, in addition to GSC and each state agency, to include in the information placed on the network, to the extent it is feasible, information relating to goods and services for each procurement contact information, and bid or proposal information (Section 2177.005). The bill requires GSC to adopt rules not later than January 1, 2002, specifying the circumstances under which it is advantageous for the state to allow a state agency or local government to purchase goods or services under a contract made by a local government, a school district, or a participating institution of higher education. If GSC rules allow other agencies to make purchases under a contract entered into by an agency using delegated purchasing authority, the agency purchasing under delegated authority is authorized to offer the goods or services available under the contract to local governments, school districts, or participating institutions of higher education. The bill removes provisions that a state agency first establish that the goods or services being offered under its contract are not available under a contract administered by GSC and inform GSC of the terms of the contract and capabilities of the vendor (Sec. 2155.079, Government Code and Sec. 271.084, Local Government Code). EFFECTIVE DATE September 1, 2001.