SRC-JEC S.B. 354 77(R)BILL ANALYSIS Senate Research CenterS.B. 354 By: Lindsay Intergovernmental Relations 6/22/2001 Enrolled DIGEST AND PURPOSE Prior to 1999, local government corporations were used primarily for transportation-related purposes and supervised by the Transportation Commission. However, these corporations were removed from the supervision of the Transportation Commission and their authority was broadened to include nontransportation-related functions with the passage of H.B. 2684 during the 76th Legislature. The applicability of state purchasing restrictions and procedures to local government corporations has been a source of confusion. S.B. 354 limits local government corporations to transportation-related purposes with some exceptions for projects already initiated, makes reporting requirements for the local government corporations, and clarifies that they are subject to the applicable procurement restrictions and procedures that apply to the governmental entities that created them. RULEMAKING AUTHORITY This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 431.101, Transportation Code, by amending Subsection (e) and adding Subsections (g)-(j), as follows: (e) Provides that, except as provided by Subsections (g), (h), and (i), a local government corporation is subject to all state law related to the design and construction of projects, including the procurement of design and construction services, that applies to the local government that created the corporation. Provides that, if a local government corporation is created jointly by more than one local government, and the local governments have different threshold contract amounts at which competitive bidding is required, the lowest amount applies to the corporation. Deletes text regarding property and improvements and contracts awarded by a local government corporation. (g) Exempts a corporation created by a municipality for the purpose of developing a convention center hotel project from competitive bidding requirements and other restrictions on the award of contracts. (h) Provides that a corporation created by a municipality after September 1, 1999, for the purpose of developing water treatment and distribution facilities is exempt from competitive bidding requirements and other restrictions on the award of contracts for the limited purpose of completing projects as described in a project definition document issued before December 31, 2000. Provides that any expansion of the treatment facility beyond the project described in the project definition document is exempt from competitive bidding requirements but is required to comply with Chapter 2254, Government Code. Provides that any expansion of distribution facilities by the corporation is subject to all state law that applies to the local government that created the corporation, as provided in Subsection (e). (i) Exempts a local government corporation created for the purpose of developing an area within a tax increment reinvestment zone created by a municipality under Chapter 311, Tax Code, from competitive bidding requirements but requires it to comply with Chapter 2254, Government Code. Also exempts a corporation created for the purpose described by this subsection from any competitive bidding requirement or restriction imposed on the procedure regarding the lease, sale, or other disposition of real property. (j) Provides that any competitive bidding requirement imposed on the procedure regarding the lease, sale, or other disposition of property does not apply to a transaction related to the transfer of water rights by a local government corporation. SECTION 2. Amends Chapter 431D, Transportation Code, by adding Sections 431.110 and 431.111, as follows: Sec. 431.110. CONFLICT OF INTEREST IN CONTRACT. Provides that the provisions of Chapter 171 (Regulation of Conflicts of Interest of Officers of Municipalities, Counties, and Certain Other Local Governments), Local Government Code, apply to the award of a contract by a local government corporation. Sec. 431.111. ANNUAL REPORT TO COMPTROLLER. Requires the board of a local government corporation, not later than February 1 of each year, to submit to the comptroller a report in the form required by the comptroller. Prohibits the form from exceeding one page in length. Sets forth requirements for the report. Requires the board to submit a copy of the report to the local government that created the corporation. SECTION 3. Makes application of this Act prospective, with exceptions. SECTION 4. Effective date: upon passage or September 1, 2001.