LEGISLATIVE BUDGET BOARD
                              Austin, Texas
                                     
                    FISCAL NOTE, 77th Regular Session
  
                              April 21, 2001
  
  
          TO:  Honorable Clyde Alexander, Chair, House Committee on
               Transportation
  
        FROM:  John Keel, Director, Legislative Budget Board
  
       IN RE:  HB3237  by Hamric (Relating to contracts for the
               development of transportation projects by the Texas
               Department of Transportation and the Texas Turnpike
               Authority division of the Texas Department of
               Transportation.), As Introduced
  
**************************************************************************
*  No significant fiscal implication to the State is anticipated.        *
**************************************************************************
  
The bill would amend the Transportation Code to authorize the use of the
design-build contracting method by the Texas Department of Transportation
(TxDOT) and the Texas Turnpike Authority (TTA) for projects costing more
than $50 million.

The bill would establish contractor qualification requirements,
procedures for the evaluation and selection of a design-build firm, and
procedures for the negotiation of contracts.  The bill would require
TxDOT or TTA to pay an unsuccessful design-build firm a stipulated amount
equal to at least 0.5 percent of the final contract price for any cost
incurred preparing the proposal.  After payment, TxDOT or TTA could use
any design or design feature contained in the proposal, including
technologies, techniques, methods, processes, and information.

The bill would authorize a design-build pilot program and require TxDOT
and TTA to conduct an interim study on the use of design-build
contracting and submit a report to the 79th Legislature.  In addition,
the bill would limit the number of design-build projects conducted by
TxDOT and TTA.  The bill would require TxDOT and TTA to submit biennial
reports to the Legislature no later than February 1 of each odd-numbered
year.  The bill would also require TxDOT, TTA, and the Office of the
State Auditor to submit a final report relating to the use of
design-build contracting that would be due no later than December 1,
2008.

It is assumed any savings from the design-build approach would be used to
fund other transportation related projects. 

This bill would take effect September 1, 2001.  The pilot program would
expire December 31, 2009.
  
Local Government Impact
  
No fiscal implication to units of local government is anticipated.
  
  
Source Agencies:   601   Texas Department of Transportation
LBB Staff:         JK, JO, MW