HBA-LJP C.S.S.B. 354 77(R) BILL ANALYSIS Office of House Bill AnalysisC.S.S.B. 354 By: Lindsay Transportation 4/25/2001 Committee Report (Substituted) BACKGROUND AND PURPOSE Prior to 1999, legislation relating to local government corporations (LGC) provided primarily for functions related to transportation and required LGCs to be governed by the Texas Transportation Commission (commission). Under current law, LGCs are not governed by the commission and are authorized to provide other functions and services. This has created confusion regarding the applicability of state purchasing restrictions and procedures to LGCs. C.S.S.B. 354 provides that LGCs are subject to all state law related to the design and construction of projects, requires LGCs to make annual reports, and provides that LGCs are subject to regulations on conflicts of interest in local government contracts. 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. ANALYSIS C.S.S.B. 354 amends Transportation Code to provide that a local government corporation (LGC) is subject to all state law related to the design and construction of projects, including procurement of design and construction services, that apply to the local government that created the corporation. If an LGC is created jointly by multiple local governments and the local governments have different threshold contract amounts at which competitive bidding is required, the lowest amount applies to the LGC. The bill sets forth exemptions from competitive bidding requirements and other restrictions on the awarding of contracts for certain LGCs. Provisions regarding the regulation of conflicts of interest apply to the award of contracts by an LGC. The bill requires the board of an LGC to submit an annual report on the revenues, expenditures, and activities of the LGC during the preceding fiscal year to the comptroller of public accounts and to the local government that created the LGC. EFFECTIVE DATE On passage, or if the Act does not receive the necessary vote, the Act takes effect September 1, 2001. COMPARISON OF ORIGINAL TO SUBSTITUTE C.S.S.B. 354 amends the original to provide additional exemptions related to projects for a tax increment reinvestment zone and the transfer of water rights from competitive bidding requirements and other restrictions on the awarding of contracts for certain local government corporations (LGC). C.S.S.B. 354 expands the current exemption for an LGC created after September 1, 1999 for the purpose of the development of a convention center hotel project to any LGC created for the purpose of such development. The substitute also modifies the exemption for the expansion of a water treatment and distribution facility project that is beyond the project described in the project definition document. The substitute requires an LGC to comply with the Professional Services Procurement Act.