Austin, Texas
                    FISCAL NOTE, 77th Regular Session
                            February 15, 2001
          TO:  Honorable Tom Ramsay, Chair, House Committee on County
        FROM:  John Keel, Director, Legislative Budget Board
       IN RE:  HB197  by Solomons (Relating to the threshold contract
               amount at which certain political subdivisions are
               required to engage in a competitive purchasing
               procedure.), Committee Report 1st House, as amended
*  No fiscal implication to the State is anticipated.                    *
Local Government Impact
Under current statute, municipalities may not enter into a contract
without following rules for competitive bidding or competitive sealed
proposals if the project would cost more than $15,000.  Sole-source
purchases are exempt from the competitive bidding process if the purchase
would cost $15,000 or less. Current law also requires a municipality to
contact at least two historically underutilized businesses (HUB) for
projects that would cost between $3,000 and $15,000. The bill, as
amended, would change the minimum expenditure requirement from $15,000 to
$25,000 before a municipality would have to use either bidding process
and in applying the exemption for sole-source purchases.  Additionally,
the bill as amended would increase the maximum from $15,000 to $25,000
for projects that would require the municipality to contact at least two
HUBs on a rotating basis. The Act would take effect September 1, 2001.

Municipalities would experience a moderate savings by being able to make
expenditures without the expense of the bidding process for those
projects in the newly opened range of $15,001 and $25,000.
Additionally, there would be no significant fiscal impact resulting from
changing the cost range for projects requiring contacting at least two
Source Agencies:   304   Comptroller of Public Accounts
LBB Staff:         JK, DB