1-1                                   AN ACT
 1-2     relating to the powers of a local government corporation.
 1-3           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-4           SECTION 1.  Section 431.101, Transportation Code, is amended
 1-5     by amending Subsection (e) and adding Subsections (g) through (j)
 1-6     to read as follows:
 1-7           (e)  Except as provided by Subsections (g), (h), and (i), a
 1-8     local government corporation is subject to all state law related to
 1-9     the design and construction of projects, including the procurement
1-10     of design and construction services, that applies to the local
1-11     government that created the corporation.  If a local government
1-12     corporation is created jointly by more than one local government
1-13     and the local governments have different threshold contract amounts
1-14     at which competitive bidding is required, the lowest amount applies
1-15     to the corporation [Section 394.904(a), Local Government Code,
1-16     applies to property and improvements owned by a local government
1-17     corporation.  Section 394.904(b) of that code applies to each
1-18     contract awarded by the local government corporation].
1-19           (g)  A corporation created by a municipality for the purpose
1-20     of developing a convention center hotel project is exempt from
1-21     competitive bidding requirements and other restrictions on the
1-22     award of contracts.
1-23           (h)  A corporation created by a municipality after September
1-24     1, 1999, for the purpose of developing water treatment and
1-25     distribution facilities is exempt from competitive bidding
 2-1     requirements and other restrictions on the award of contracts for
 2-2     the limited purpose of completing projects as described in a
 2-3     project definition document issued before December 31, 2000.  Any
 2-4     expansion of treatment facilities beyond the project described in
 2-5     the project definition document is exempt from the competitive
 2-6     bidding requirements but shall comply with Chapter 2254, Government
 2-7     Code.  Any expansion of distribution facilities by the corporation
 2-8     is subject to all state law that applies to the local government
 2-9     that created the corporation, as provided in Subsection (e).
2-10           (i)  A local government corporation created for the purpose
2-11     of developing an area within a tax increment reinvestment zone
2-12     created by a municipality pursuant to Chapter 311, Tax Code, is
2-13     exempt from competitive bidding requirements but shall comply with
2-14     Chapter 2254, Government Code.  A corporation created for the
2-15     purpose described by this subsection is also exempt from any
2-16     competitive bidding requirement or restriction imposed on the
2-17     procedure regarding the lease, sale, or other disposition of real
2-18     property.
2-19           (j)  Any competitive bidding requirement imposed on the
2-20     procedure regarding the lease, sale, or other disposition of
2-21     property does not apply to a transaction related to the transfer of
2-22     water rights by a local government corporation.
2-23           SECTION 2.  Subchapter D, Chapter 431, Transportation Code,
2-24     is amended by adding Sections 431.110 and 431.111 to read as
2-25     follows:
2-26           Sec. 431.110.  CONFLICT OF INTEREST IN CONTRACT.  Chapter
 3-1     171, Local Government Code, applies to the award of a contract by a
 3-2     local government corporation.
 3-3           Sec. 431.111.  ANNUAL REPORT TO COMPTROLLER.  (a)  Not later
 3-4     than February 1 of each year, the board of a local government
 3-5     corporation shall submit to the comptroller a report in the form
 3-6     required by the comptroller.  The form for the report may not
 3-7     exceed one page in length.
 3-8           (b)  The report must include:
 3-9                 (1)  a statement of the corporation's purpose;
3-10                 (2)  a statement of the corporation's total revenues
3-11     and expenditures during the preceding fiscal year; and
3-12                 (3)  a summary of the corporation's activities during
3-13     the preceding fiscal year, including any bonds issued and capital
3-14     projects undertaken.
3-15           (c)  The board shall submit a copy of the report to the local
3-16     government that created the corporation.
3-17           SECTION 3.  Except as provided by Subsections (g), (h), and
3-18     (i), Section 431.101,  Transportation Code, as added by this Act,
3-19     the change in law made by this Act to Subsection (e), Section
3-20     431.101, Transportation Code, applies to all contracts entered into
3-21     by a local government corporation on or after the effective date of
3-22     this Act unless a local government corporation first published
3-23     notice of the contract on or before May 15, 2001.  A contract,
3-24     public notice of which was first published by a local government
3-25     corporation on or before May 15, 2001, is governed by that section
3-26     as it existed immediately before the effective date of this Act,
 4-1     and the former law is continued in effect for that purpose.
 4-2           SECTION 4.  This Act takes effect immediately if it receives
 4-3     a vote of two-thirds of all the members elected to each house, as
 4-4     provided by Section 39, Article III, Texas Constitution.  If this
 4-5     Act does not receive the vote necessary for immediate effect, this
 4-6     Act takes effect September 1, 2001.
         _______________________________     _______________________________
             President of the Senate              Speaker of the House
               I hereby certify that S.B. No. 354 passed the Senate on
         March 14, 2001, by the following vote:  Yeas 29, Nays 0, one
         present not voting; and that the Senate concurred in House
         amendments on May 24, 2001, by the following vote:  Yeas 30,
         Nays 0, one present not voting.
                                             _______________________________
                                                 Secretary of the Senate
               I hereby certify that S.B. No. 354 passed the House, with
         amendments, on May 17, 2001, by a non-record vote.
                                             _______________________________
                                                Chief Clerk of the House
         Approved:
         _______________________________
                      Date
         _______________________________
                    Governor