HBA-EDN C.S.S.B. 311 77(R) BILL ANALYSIS Office of House Bill AnalysisC.S.S.B. 311 By: Zaffirini State Affairs 5/17/2001 Committee Report (Substituted) BACKGROUND AND PURPOSE The Legislature first created a single state agency to provide business services for state agencies and other governmental entities in 1919 by consolidating 21 agencies and establishing the State Board of Control. Sixty years later, in 1979, the State Board of Control was renamed the State Purchasing and General Services Commission and shortened to simply the General Services Commission (GSC) in 1991. GSC's primary function is to provide central services for state agencies and, in some cases, local governments. GSC's activities can be organized into three major categories: procuring goods and services for customers; providing facilities management and construction services for state agencies; and providing administrative support to agency staff. GSC is subject to the Texas Sunset Act and will be abolished on September 1, 2001, unless continued in existence by the legislature. C.S.S.B. 311 abolishes GSC and provides for the transfer of its functions to other agencies, including the newly created Texas Building Commission and the newly created Texas Procurement Commission. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that rulemaking authority is expressly delegated to the Texas Procurement Commission in SECTION 1.07 (Section 2152.003, Government Code), SECTION 1.31, SECTION 2.01 (Section 2155.503, Government Code), SECTION 2.02 (Section 2155.079, Government Code), SECTION 2.03, SECTION 7.06 (Sections 2177.051 and 2177.102, Government Code), SECTION 11.01 (Section 2175.065, Government Code), and SECTION 11.02 (Sections 2175.129 and 2175.186, Government Code); to the Texas Building Commission in SECTION 1.31, SECTION 1.16 (Section 2153.004, Government Code), SECTION 9.02 (Section 2166.2525, Government Code), SECTION 10.01 (Section 2167.0021, Government Code), and SECTION 12.01 (Section 2175.902, Government Code); to the attorney general in SECTION 5.01 (Sections 2262.051 and 2262.054, Government Code); and to the Department of Information Resources in SECTION 1.31, SECTION 2.01 (Section 2155.503, Government Code), SECTION 4.27 (Section 2170.058, Government Code), and SECTION 7.06 (Sections 2177.051 and 2177.102, Government Code). It is the opinion of the Office of House Bill Analysis that rulemaking authority previously delegated to the General Services Commission is being transferred to the Texas Procurement Commission, the Texas Building Commission, and the Department of Information Resources, as appropriate. In addition, rulemaking authority previously delegated to the telecommunications planning group is being transferred to the telecommunications planning and oversight council. Rulemaking authority previously delegated to the Texas Department of Economic Development is being transferred to the Texas Procurement Commission. ANALYSIS C.S.S.B. 311 amends the Government Code to abolish the General Services Commission (GSC) on October 1, 2001, and to create the Texas Building Commission (TBC) and the Texas Procurement Commission (TPC). The bill transfers from GSC to TPC functions relating to the purchase of certain goods or services for the state, other than services relating to the construction, repair, acquisition, maintenance, or charge and control of real property. The bill transfers from GSC to the Department of Information Resources (DIR) functions relating to the provision of telecommunications services for state government or to the establishment of the electronic procurement marketplace or the electronic commerce network. The bill transfers from GSC to TBC functions relating to state buildings, grounds, and property and related services, other than matters related to the purchase of goods or to the disposition of surplus or salvage property. The bill provides for the continuation of TBC until September 1, 2007, and sets forth standard Sunset Advisory Commission recommendations regarding conflicts of interest, equal employment, member removal, and standards of conduct. The bill also provides for the continuation of TPC until September 1, 2013, and sets forth standard Sunset Advisory Commission recommendations regarding conflicts of interest, member removal, member training, the maintenance of written complaints, and the state employee incentive program (SECTIONS 1.01- 1.07, 1.09, 1.10, 1.13-1.16, and 1.26). Transfer of Responsibilities C.S.S.B. 311 transfers all functions, activities, employees, proceedings, money, contracts, leases, rights, obligations, property, and funds appropriated by the legislature from GSC to the appropriate agencies on October 1, 2001, when GSC is abolished and provides that rules or forms adopted or waivers, licenses, or contracts awarded remain in effect until changed. The bill requires GSC, TPC, TBC, and DIR to establish a transition plan for the transfer of these responsibilities and sets forth provisions for the contents of the plan. Before December 31, 2001, TPC, TBC, and DIR are required, by rule, to adopt a memorandum of understanding under which the agencies clarify the transfer of such powers and duties (SECTIONS 1.26-1.31). Texas Procurement Commission C.S.S.B. 311 authorizes TPC to adopt rules to efficiently and effectively accomplish its functions (SECTION 1.07). The bill provides that TPC is composed of five public representatives and sets forth provisions regarding the appointment, terms, and meetings of TPC members (SECTIONS 1.08, 1.11, 1.12, and 1.32). Provisions regarding TPC member training do not apply until June 1, 2002 (SECTION 1.32). Texas Building Commission C.S.S.B. 311 establishes a Texas building division within the State Preservation Board to administer the duties of TBC relating to state buildings, grounds, or property or related services, establishes that the executive director of the State Preservation Board is the executive director of the division, and sets forth the division's administration. The bill authorizes TBC to adopt rules to efficiently and effectively accomplish its functions (SECTION 1.16). TBC is composed of the governor, the lieutenant governor, and one member appointed by the governor from a list of nominees submitted by the speaker of the house of representatives. The governor serves as the presiding officer of TBC. The bill sets forth provisions regarding the term of the appointed member, meetings, and compensation of TBC members (SECTIONS 1.16 and 1.33). Multiple Award Contracts C.S.S.B. 311 requires TPC and DIR to adopt rules to develop a schedule of multiple award contracts that have previously been awarded using a competitive process by the federal government or any other governmental entity in any state and sets forth provisions regarding the development and use of such a schedule. The bill requires TPC to adopt rules specifying the circumstances under which it is advantageous for the state to allow a state agency to purchase goods or services under a contract made by another state agency other than TPC. TPC is required to develop initial schedules of multiple award contracts not later than March 1, 2002, and to adopt the required rules not later than January 1, 2002 (SECTIONS 2.012.03). Information Technology Resources The bill requires DIR to create a division to oversee the implementation of major information resources projects designated by the legislature and identified in a state agency's biennial operating plan, outlines DIR's duties regarding the division, and establishes funding for the division (SECTION 3.02). The bill establishes the telecommunications planning and oversight council (council) to perform strategic planning for all state telecommunications services and sets forth provisions regarding the council's composition, oversight of telecommunications systems, and appointments to advisory committees (SECTIONS 4.02, 4.04, 4.07, and 4.10). The bill abolishes the telecommunications planning group and transfers its powers, duties, rights, contracts, appropriations, property, records, rules, policies, plans, waivers, standards, requirements, and guidelines to the council (SECTION 4.32). The bill requires the council to develop service objectives and performance measures for the consolidated telecommunications system (TEX-AN) and the centralized capitol complex telephone system (CCTS) (SECTION 4.10). The bill requires the council to submit an annual report to DIR and to each entity served by TEX-AN or CCTS with detailed performance information for the systems, provides for the contents of the annual report, and requires the first annual report to be issued not later than September 1, 2002 (SECTIONS 4.11 and 4.33). The bill also requires the council to submit a biennial report to the legislature addressing CCTS and TEX-AN performance, telecommunications system needs, and recommended statutory changes (SECTION 4.12). The bill authorizes TPC to use reverse auctions as a purchasing method and requires TPC to electronically maintain a bidders list that is integrated into the electronic procurement marketplace established by DIR (SECTIONS 7.01 and 7.03). The bill transfers from the Texas Department of Economic Development to TPC duties, including rulemaking authority, regarding the Electronic State Business Daily (business daily) (SECTIONS 7.02, 7.07, and 7.08). The bill requires DIR, in consultation with TPC, to establish and manage the electronic infrastructure of an online travel reservation and ticketing capability for use by state agencies participating in TPC's contracts for travel services and sets forth procedures for establishing the ticket capability (SECTION 7.05). The bill requires DIR to have online reservation and ticketing capability fully operational by September 1, 2002 (SECTION 7.09). The bill also requires TPC to maintain at least one contract with a provider of travel services that offers reservation and ticketing services in person or by telephone (SECTION 7.04). C.S.S.B. 311 requires DIR to establish and manage the electronic infrastructure of an electronic procurement marketplace (marketplace) and an electronic commerce network (commerce network). The bill authorizes DIR or TPC to enter into contracts with private or public entities to establish or maintain all or part of the databases comprising the marketplace and to establish or support various elements of the commerce network. The bill authorizes DIR to adopt rules relating to the design and use of the marketplace and the use and technical requirements of the commerce network (SECTION 7.06). The bill sets forth provisions regarding the establishment and operation of the marketplace and the commerce network and exempts procurements for major construction projects from provisions regarding the commerce network. The bill requires TPC to integrate the business daily into the marketplace. The bill also requires TPC and DIR to ensure that small and historically underutilized businesses have maximum access to electronic commerce opportunities. The bill requires TPC, at least quarterly, to consult with certain entities to ensure that the electronic procurement system meets the needs of users of the system. The bill requires DIR, with TPC's assistance, to assess whether all or parts of the electronic procurement system should interface with Texas Online and authorizes such an interface (SECTION 7.06). Contracting C.S.S.B. 311 requires the attorney general, in consultation with TPC, DIR, the comptroller, and the state auditor, to develop and periodically update a contract management guide (guide) for use by state agencies, specifies what the guide must include, and requires state agencies to comply with the guide beginning January 1, 2003. The bill exempts an institution of higher education and the Texas Department of Transportation, with regard to the solicitation of contracts, from statewide contract management provisions. The bill authorizes the attorney general to adopt rules necessary to develop the guide and to establish by rule procedures by which each state agency is required to invite public comment by publishing the proposed technical specifications for major contracts on the Internet through the marketplace. The bill creates a contract advisory team to assist state agencies in improving contract management practices (SECTIONS 5.01 and 5.07). Outsourcing C.S.S.B. 311 requires TPC to develop a systematic review process to identify commercially available services being performed by TPC and to study the services to determine if they may be better provided by other state agency providers of the services or private commercial sources. The bill sets forth procedures for the systematic review. The bill requires TPC to consider all of its direct and indirect costs in determining the cost of providing a service and sets forth procedures for comparing costs and contracting with another state agency or private source. The bill prohibits TPC from providing a service that GSC did not provide as of September 1, 2001, unless TPC determines that it can perform the service at a higher level of quality or at a lower cost than other state agency providers of the service or private commercial sources (SECTION 6.01). State Cemetery C.S.S.B. 311 requires the State Cemetery Committee (committee) to develop a budget for the operations of TBC relating to the State Cemetery (cemetery) and to determine the salary of employees of the Texas building division of the State Preservation Board whose duties primarily relate to the operation of the cemetery (SECTION 8.01). The bill requires the legislature to separately appropriate money to the committee within the appropriations to the State Preservation Board for all matters relating to the operation of the cemetery beginning September 1, 2003 (SECTIONS 8.02 and 8.04). The bill sets forth standard Sunset Advisory Commission recommendations regarding committee member removal, standards of conduct, member training, policy implementation by the committee, and public testimony and specifies that the recommendations relating to member training do not apply until March 1, 2002 (SECTIONS 8.02 and 8.03). Facilities Management C.S.S.B. 311 authorizes TBC to use design-build, construction manager-at-risk, and competitive sealed proposal contracting methods and establishes procedures for using these methods (SECTIONS 9.059.07). The bill requires TBC to adopt rules that determine the circumstances for use of these contracting methods and, in developing the rules, requires TBC to solicit advice and comment from design and construction professionals regarding the criteria TBC will use in determining the best method for a project (SECTION 9.02). The bill sets forth provisions regarding the evaluation of bids and proposals for construction services (SECTION 9.03). The bill authorizes TBC to use the lowest and best bid method for a project and modifies the bidding procedures (SECTION 9.04). The bill requires TBC to lease space for the use of a state agency on the basis of obtaining the best value for the state and sets forth criteria TBC may consider in determining the best value. The bill requires TBC to adopt rules establishing guidelines for the determination of best value in a lease contract (SECTION 10.01). The bill authorizes TBC to contract with private brokerage or real estate firms to assist TBC in obtaining and leasing space and to negotiate directly to lease space from a private source (SECTIONS 10.05 and 10.08). The bill authorizes TBC to delegate leasing authority to state agencies, including institutions of higher education (SECTION 10.03). The bill requires TBC to report a state agency's noncompliance with TBC rule or other state law related to leasing requirements to the governor, lieutenant governor, speaker of the house of representatives, and members of the state agency's governing body. The bill requires the staff of TBC to annually submit a report to TBC regarding opportunities for delegating leasing authority to state agencies with statewide operations and provides that the report must include comments from such agencies. The bill sets forth provisions requiring TBC to conduct a warehouse space use study in Austin, and provides that such provisions expire September 1, 2003 (SECTION 10.10). C.S.S.B. 311 requires TBC to establish a mandatory recycling program for a state agency that occupies a building under its control and sets forth criteria which TBC is required by rule to establish for collecting and recycling paper. The bill authorizes TBC to enter into an interagency agreement to provide recycling services to a state agency otherwise excluded from the program (SECTION 12.01). Surplus Property C.S.S.B. 311 grants TPC responsibility for the state's surplus property program. The bill authorizes TPC to delegate authority to a state agency to dispose of its surplus or salvage property if the agency can do so at a savings to the state and sets forth provisions regarding the disposition of surplus or salvage property. The bill requires TPC to establish by rule the criteria for determining that a delegation of authority to a state agency results in cost savings to the state and to adopt rules establishing guidelines for determining the most advantageous method of sale for the state. The bill requires TPC to contract for disposal of surplus or salvage property in a manner that maximizes value to the state (SECTIONS 11.01 and 11.02). The provisions regarding surplus property take effect January 1, 2002 (SECTION 11.03). Historically Underutilized Businesses C.S.S.B. 311 authorizes nonprofit organizations to certify historically underutilized businesses (HUB) on behalf of a local government. The bill encourages contractors' participation in the HUB mentor-prot_g_ program (SECTIONS 13.01 and 13.03). State Governmental Bodies C.S.S.B. 311 requires each state governmental body to report to TPC, rather than the Legislative Budget Board, fiscal and other information relating to making information accessible to the public (SECTION 14.02). EFFECTIVE DATE September 1, 2001, except as otherwise provided in the bill. COMPARISON OF ORIGINAL TO SUBSTITUTE C.S.S.B. 311 modifies the original by abolishing the General Services Commission (GSC) and transferring all of its functions to other agencies. The original continued GSC until September 1, 2013, and transferred functions relating to telecommunications operations to the Department of Information Resources (DIR). The substitute creates the Texas Building Commission (TBC) and establishes a Texas building division within the State Preservation Board to administer the duties of TBC relating to state buildings, grounds, or property or related services (SECTION 1.16). The substitute also creates the Texas Procurement Commission to be responsible for functions of GSC relating to the purchase of certain goods or services for the state (SECTION 1.07). The substitute requires the attorney general to develop a contract management guide for use by state agencies and creates a contract advisory team to assist state agencies in improving contract management practices, whereas the original only set forth contracting guidelines (SECTION 5.01). The substitute also removes the interagency work group created in the original to assist DIR in developing contracting guidelines. The substitute allows nonprofit organizations to certify historically underutilized businesses on behalf of a local government and encourages contractors' participation in the HUB mentor-prot_g_ program (SECTIONS 13.01 and 13.03).