SRC-JEC C.S.S.B. 354 77(R)BILL ANALYSIS


Senate Research CenterC.S.S.B. 354
By: Lindsay
Intergovernmental Relations
3/6/2001
Committee Report (Substituted)


DIGEST AND PURPOSE          

Prior to 1999, local government corporations, as provided by the
Transportation Code, 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
non-transportation-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 questioned,
causing confusion and controversy.  C.S.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
Subsections (e) and (f) and adding Subsections (g), (h), and (i), as
follows: 

(e)  Provides that, except as provided by Subsections (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.  Requires the corporation, in the event that a local
government corporation is created jointly by multiple local governments,
and if the local governments have different threshold contract amounts at
which competitive bidding is required, to follow the lower amount.  Deletes
text regarding property and improvements and contracts awarded by a local
government corporation. 

(f)  Provides that a local government corporation is not subject to a
competitive bidding requirement or other restriction imposed on the
procedure related to the lease, sale, or other disposition of real
property. 

 (g)  Redesignates Subsection (f) as Subsection (g).

(h)  Provides that a corporation created after September 1, 1999, by a
municipality for the purpose of the development of a convention center
hotel project is exempt from competitive bidding requirements and other
restrictions on the award of contracts for the limited purpose of
completing a project initiated prior to December 31, 2000. 

(i)  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
prior to 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 and other restrictions on the
award of contracts for the purpose of contracting for the operation of the
facility, but is subject to all state law related to design and
construction procurement that applies to the local government that created
the corporation, as provided in Subsection (e). 

SECTION 2.  Amends Chapter 431D, Transportation Code, by adding Sections
431.110 and 431.111, as follows: 

Sec. 431.110.  CONFLICT OF INTEREST IN CONTRACTS.  Requires the provisions
of Chapter 171 (Regulation of Conflicts of Interest of Officers of
Municipalities, Counties, and Certain Other Local Governments), Local
Government Code, to apply to the award of contracts 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 a copy of the report to be also
submitted to the local government that created the corporation. 

SECTION 3.  Makes application of this Act prospective, with an exception. 

SECTION 4.  Effective date:  upon passage or September 1, 2001.

SUMMARY OF COMMITTEE CHANGES

Differs from the original as follows:

SECTION 1.  Inserts Subsections (g), (h), and (i), and amends Subsections
(e) and (f), rather than amending Subsections (a) and (e), of Section
431.101, Transportation Code.  In Subsection (e), inserts an exception as
provided by Subsections (h) and (i), changes the terms "statutes, codes,
and other laws" to "state law,"  and inserts a sentence regarding a local
government corporation that is created jointly by multiple local
governments. 

SECTION 2.  Inserts new text for SECTION 2, adding Sections 431.110 and
431.111, Transportation Code, and renumbers former SECTION 2 as SECTION 4. 

SECTION 3.  As added, inserts prospective clause.

SECTION 4.  No change in former SECTION 2.