By: Coleman (Senate Sponsor - West) H.B. No. 1694
         (In the Senate - Received from the House April 27, 2011;
  April 29, 2011, read first time and referred to Committee on
  Intergovernmental Relations; May 13, 2011, reported favorably by
  the following vote:  Yeas 5, Nays 0; May 13, 2011, sent to printer.)
 
 
A BILL TO BE ENTITLED
 
AN ACT
 
 
  relating to the purchasing and contracting authority of certain
  governmental entities.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 262.011, Local Government Code, is
  amended by amending Subsections (f), (g), (k), (m), and (o) and
  adding Subsection (q) to read as follows:
         (f)  A purchase made by the county purchasing agent shall be
  paid for by an electronic transfer, check, or [a] warrant drawn by
  the county auditor on funds in the county treasury in the manner
  provided by law. The county auditor may not draw and the county
  treasurer may not honor an electronic transfer, check, or [a]
  warrant for a purchase unless the purchase is made by the county
  purchasing agent or on competitive bid as provided by law.
         (g)  The county purchasing agent may cooperate with the
  purchasing agent of a municipality in the county to purchase any
  item in volume as may be necessary. The county treasurer shall
  honor an electronic transfer, check, or [a] warrant drawn by the
  county auditor to reimburse the municipality's purchasing agent
  making the purchase for the county.
         (k)  The board that appoints the county purchasing agent
  shall set the salary of the agent in an amount not less than $5,000 a
  year, payable in equal monthly installments or by any other
  distribution at the option of the county. The salary shall be paid
  by an electronic transfer, check, or warrant [warrants] drawn on
  funds in the county treasury.
         (m)  A person, including an officer, agent, or employee of a
  county or of a subdivision or department of a county, commits an
  offense if the person violates this section. An offense under this
  subsection is a misdemeanor punishable by a fine of not less than
  $10 or more than $100[, by confinement in the county jail for not
  less than 30 days or more than one year, or by both the fine and
  confinement]. Each act in violation of this section is a separate
  offense.
         (o)  The county purchasing agent shall adopt the rules and
  procedures necessary to implement the agent's duties under this
  section subject to approval by the commissioners court.
  Notwithstanding Subsection (f) or other law, rules and procedures
  adopted under this subsection may include rules and procedures for
  persons to use county purchasing cards to pay for county purchases
  under the direction and supervision of the county purchasing agent.
  Procedures for use of purchasing cards may not avoid the
  competitive bidding requirements of this chapter or other
  requirements of county financial law.
         (q)  An electronic transfer under this chapter must provide
  the same level of internal controls and statutory authorizations as
  required for a check or warrant.
         SECTION 2.  Sections 262.0115(d) and (e), Local Government
  Code, are amended to read as follows:
         (d)  Under the supervision of the commissioners court, the
  purchasing agent shall carry out the functions prescribed by law
  for a purchasing agent under Section 262.011 and for any
  administrative function of the county auditor in regard to county
  purchases and contracts and shall administer the procedures
  prescribed by law for notice and public bidding for county
  purchases and contracts.
         (e)  A county that has established the position of county
  purchasing agent under this section may abolish the position at any
  time. On the abolition of the position, the county auditor shall
  assume the functions previously performed by the purchasing agent
  regarding the notice for and opening of competitive bids or
  proposals under this chapter and Chapter 271.
         SECTION 3.  Section 262.022, Local Government Code, is
  amended by amending Subdivisions (5) and (6) and adding
  Subdivisions (5-a) and (5-b) to read as follows:
               (5)  "Item" means any service, equipment, good, or
  other tangible or intangible personal property, including
  insurance and high technology items. The term does not include
  professional services as defined by Section 2254.002, Government
  Code.
               (5-a)  "Lowest and best" means a bid or offer providing
  the best value considering associated direct and indirect costs,
  including transport, maintenance, reliability, life cycle,
  warranties, and customer service after a sale.
               (5-b)  "Normal purchasing practice" means:
                     (A)  an accepted custom, practice, or standard for
  government procurement in the state; or
                     (B)  a practice recognized by a national
  purchasing association regarding the purchase of a particular good
  or service.
               (6)  "Purchase" means any kind of acquisition,
  including by a lease or revenue contract[, of an item].
         SECTION 4.  Section 262.0225, Local Government Code, is
  amended by adding Subsection (d) to read as follows:
         (d)  A county that complies in good faith with the
  competitive bidding requirements of this chapter and receives no
  responsive bids for an item may procure the item under Section
  262.0245.
         SECTION 5.  Section 262.0245, Local Government Code, is
  amended to read as follows:
         Sec. 262.0245.  COMPETITIVE PROCUREMENT PROCEDURES ADOPTED
  BY COUNTY PURCHASING AGENTS OR COMMISSIONERS COURT. A county
  purchasing agent or, in a county without a purchasing agent, the
  commissioners court shall adopt procedures that provide for
  competitive procurement, to the extent practicable under the
  circumstances, for the county purchase of an item that is not
  subject to competitive procurement or for which the county receives
  no responsive bid.
         SECTION 6.  Section 262.025, Local Government Code, is
  amended by amending Subsection (a) and adding Subsection (a-1) to
  read as follows:
         (a)   A notice of a proposed purchase must be published at
  least once a week for two consecutive weeks in a newspaper of
  general circulation in the county, with the first day of
  publication occurring at least 14 days before the [14th day before
  the] date of the bid opening. If there is no newspaper of general
  circulation in the county, the notice must be posted in a prominent
  place in the courthouse for 14 days before the date of the bid
  opening.  Notice published in a newspaper must include:
               (1)  a general statement of the proposed purchase;
               (2)  the name and telephone number of the purchasing
  agent; and
               (3)  the county website address, if any.
         (a-1)  Subsection (a) does not require more than two notices
  in one newspaper or limit the county from providing additional
  notice for longer periods or in more locations.
         SECTION 7.  Section 262.0255, Local Government Code, is
  amended by adding Subsection (c) to read as follows:
         (c)  A commissioners court purchasing personal property
  under Section 271.083 of this code or Section 791.025, Government
  Code, may negotiate with a vendor awarded a cooperative contract
  under those sections an agreement for the vendor to purchase or
  accept as trade used equipment owned by the county.
         SECTION 8.  Section 262.0256, Local Government Code, as
  amended by Chapters 660 (H.B. 2242) and 725 (H.B. 3089), Acts of the
  78th Legislature, Regular Session, 2003, is reenacted and amended
  to read as follows:
         Sec. 262.0256.  PRE-BID CONFERENCE FOR CERTAIN COUNTIES OR A
  DISTRICT GOVERNED BY THOSE COUNTIES.  (a)  [This section applies
  only to a county with a population of 2.8 million or more.
         [(b)]  The commissioners court of the county or the governing
  body of a district or authority created under Section 59, Article
  XVI, Texas Constitution, if the governing body is the commissioners
  court of the county in which the district is located, may require a
  principal, officer, or employee of each prospective bidder to
  attend a mandatory pre-bid conference conducted for the purpose of
  discussing contract requirements and answering questions of
  prospective bidders.
         (b) [(c)]  After a conference is conducted under Subsection
  (a) [(b)], any additional required notice for the proposed purchase
  may be sent by certified mail, return receipt requested, only to
  prospective bidders who attended the conference. Notice under this
  subsection is not subject to the requirements of Section 262.025.
         SECTION 9.  Section 262.026(b), Local Government Code, is
  amended to read as follows:
         (b)  Opened bids shall be kept on file and available for
  inspection by anyone desiring to see them until the first
  anniversary of the date of opening.  Opened bids are subject to
  disclosure under Chapter 552, Government Code.
         SECTION 10.  Section 262.027, Local Government Code, is
  amended by amending Subsection (c) and adding Subsections (g) and
  (h) to read as follows:
         (c)  A contract may not be awarded to a bidder who is not the
  lowest dollar bidder meeting specifications unless, before the
  award, each lower bidder is given:
               (1)  notice of the proposed award; and
               (2)  [is given] an opportunity to appear before the
  commissioners court and present previously unconsidered evidence
  concerning the lower bid as best, which may include evidence of the
  bidder's responsibility.
         (g)  If after the award the successful bidder fails to
  qualify for required bonds, or is otherwise unable to meet the
  requirements of the award, the commissioners court may award the
  contract to the next bidder in order of ranking as lowest and best
  bid.
         (h)  Before a contract is awarded, a bidder must give written
  notice to the officer authorized to open bids that the bidder
  intends to protest an award of the contract under Subsection (c).  
  This subsection does not limit the ability of a bidder to speak at a
  public meeting of the commissioners court under rules established
  by the court.
         SECTION 11.  Section 262.0271(b), Local Government Code, is
  amended to read as follows:
         (b)  In purchasing items under this chapter through a
  competitive bidding process, if a county receives one or more bids
  from a bidder who provides reasonable [comparable] health insurance
  coverage to its employees and requires a subcontractor the bidder
  intends to use to provide reasonable [comparable] health insurance
  coverage to the subcontractor's employees and whose bid is within
  five percent of the lowest and best bid price received by the county
  from a bidder who does not provide or require reasonable 
  [comparable] health insurance coverage, the commissioners court of
  the county may give preference to the bidder who provides and
  requires reasonable [comparable] health insurance coverage.
         SECTION 12.  Section 262.0276, Local Government Code, is
  amended by amending Subsection (a) and adding Subsection (d) to
  read as follows:
         (a)  By an order adopted and entered in the minutes of the
  commissioners court and after notice is published in a newspaper of
  general circulation in the county, the commissioners court may
  adopt rules permitting the county to refuse to enter into a contract
  or other transaction with a person who owes a debt [indebted] to the
  county.
         (d)  In this section, "debt" includes delinquent taxes,
  fines, fees, and delinquencies arising from written agreements with
  the county.
         SECTION 13.  Section 262.0295(d), Local Government Code, is
  amended to read as follows:
         (d)  Within 30 days after the date the unpriced proposals are
  opened under Subsection (c), the county official shall present the
  priced bids to the commissioners court. The award of the contract
  shall be made to the responsible offeror whose bid is determined to
  be the lowest and best evaluated offer resulting from negotiation.
  All proposals and bids that have been submitted shall be available
  and open for public inspection after the contract is awarded.
         SECTION 14.  Section 262.030(b), Local Government Code, is
  amended to read as follows:
         (b)  Quotations must be solicited through a request for
  proposals. Public notice for the request for proposals must be made
  in the same manner as provided in the competitive bidding
  procedure. The request for proposals must specify the relative
  importance of price and other evaluation factors. The award of the
  contract shall be made to the responsible offeror whose proposal is
  determined to be the lowest and best evaluated offer resulting from
  negotiation, taking into consideration the relative importance of
  price and other evaluation factors set forth in the request for
  proposals.
         SECTION 15.  Section 262.034(c), Local Government Code, is
  amended to read as follows:
         (c)  A county officer or employee commits an offense if the
  officer or employee intentionally or knowingly violates this
  subchapter, other than by conduct described by Subsection (a) [or
  (b)].  An offense under this subsection is a Class C misdemeanor.
         SECTION 16.  Section 262.036(a), Local Government Code, is
  amended to read as follows:
         (a)  Notwithstanding any other provision in this chapter, a
  county [with a population of 800,000 or more] may select an
  appropriately licensed insurance agent as the sole broker of record
  to obtain proposals and coverages for insurance that provides
  necessary coverage and adequate limits of coverage in all areas of
  risk, including public official liability, property, casualty,
  workers' compensation, and specific and aggregate stop-loss
  coverage for self-funded health care.
         SECTION 17.  Subchapter C, Chapter 262, Local Government
  Code, is amended by adding Section 262.037 to read as follows:
         Sec. 262.037.  QUALIFICATION. An officer authorized to make
  a purchase on behalf of a county or a county department or office
  may not make any purchase until providing to the county judge a
  signed acknowledgment that the officer has read and understands
  this chapter.  This section does not apply in a county that has
  appointed a purchasing agent under Subchapter B.
         SECTION 18.  Section 271.029(c), Local Government Code, is
  amended to read as follows:
         (c)  An officer or employee of a governmental entity commits
  an offense if the officer or employee intentionally or knowingly
  violates this subchapter, other than by conduct described by
  Subsection (a) [or (b)].  An offense under this subsection is a
  Class C misdemeanor.
         SECTION 19.  Section 271.042, Local Government Code, is
  amended to read as follows:
         Sec. 271.042.  PURPOSE; CONFLICT.  (a)  It is the purpose of
  this subchapter to provide:
               (1)  a procedure for certain financing that is an
  alternative to the more cumbersome procedure under Chapter 252 or
  262; and
               (2)  a new class of securities to be issued and
  delivered within the financial capabilities of an issuer on
  compliance with the procedures prescribed by this subchapter.
         (b)  If there is a conflict between a provision of this
  subchapter and a provision of Chapter 252 or 262, an issuer may use
  either provision, and it is not necessary for the governing body to
  designate the law under which action is being taken.
         SECTION 20.  Section 271.064(c), Local Government Code, is
  amended to read as follows:
         (c)  An officer or employee of an issuer commits an offense
  if the officer or employee intentionally or knowingly violates this
  subchapter, other than by conduct described by Subsection (a) [or
  (b)].  An offense under this subsection is a Class C misdemeanor.
         SECTION 21.  Sections 271.181(2) and (6), Local Government
  Code, are amended to read as follows:
               (2)  "Civil works project" means:
                     (A)  roads, streets, bridges, utilities, water
  supply projects, water plants, wastewater plants, water
  distribution and wastewater conveyance facilities, desalination
  projects, wharves, docks, airport runways and taxiways, storm
  drainage and flood control projects, or transit projects;
                     (B)  types of projects or facilities related to
  those described by Paragraph (A) and associated with civil
  engineering construction; and
                     (C)  buildings or structures that are incidental
  to projects or facilities that are described by Paragraphs (A) and
  (B) and that are primarily civil engineering construction projects.
               (6)  "Local governmental entity" means a municipality,
  a county, a river authority, a defense base development authority
  established under Chapter 379B, a board of trustees under Chapter
  54, Transportation Code, a municipally owned water utility with a
  separate governing board appointed by the governing body of a
  municipality, or any other special district or authority authorized
  by law to enter into a public works contract for a civil works
  project.  The term does not include a regional tollway authority
  created under Chapter 366, Transportation Code, a regional mobility
  authority created under Chapter 370, Transportation Code, or a
  water district or authority created under Section 52, Article III,
  or Section 59, Article XVI, Texas Constitution, with a population
  of less than 50,000.
         SECTION 22.  Section 271.182, Local Government Code, as
  amended by Chapters 135 (S.B. 1047) and 725 (S.B. 229), Acts of the
  81st Legislature, Regular Session, 2009, is reenacted and amended
  to read as follows:
         Sec. 271.182.  APPLICABILITY.  (a)  This subchapter applies
  to:
               (1)  a local governmental entity with a population of
  more than 100,000 within its geographic boundaries or service area;
               (2)  a board of trustees under Chapter 54,
  Transportation Code; and[.]
               (3)  [(c) This subchapter applies to] a municipally
  owned combined electric, water, and wastewater utility situated in
  an economically distressed area and located within 30 miles of the
  Lower Texas Gulf Coast.
         (b)  For purposes of Subsection (a)(3) [this subchapter],
  "combined" means that the utilities are managed and controlled by
  one board whose members are appointed by the governing body of the
  municipality and that the financing of capital improvements is
  secured from the revenue [revenues] of all three utilities.
         SECTION 23.  Sections 271.186(a) and (b), Local Government
  Code, are amended to read as follows:
         (a)  During the first four years that this subchapter applies
  to a local governmental entity under Section 271.182:
               (1)  a local governmental entity with a population of
  500,000 or more may, under this subchapter, enter into contracts
  for not more than three projects in any fiscal year;
               (2)  a local governmental entity with a population of
  100,000 or more but less than 500,000 and a board of trustees under
  Chapter 54, Transportation Code, may, under this subchapter, enter
  into contracts for not more than two projects in any fiscal year;
  and
               (3)  a municipally owned water utility with a separate
  governing board appointed by the governing body of a municipality
  with a population of 500,000 or more may:
                     (A)  independently enter into a contract for not
  more than one civil works project in any fiscal year; and
                     (B)  enter into contracts for additional civil
  works projects in any fiscal year, but not more than the number of
  civil works projects prescribed by the limit in Subdivision (1) for
  the municipality, provided that:
                           (i)  the additional contracts for the civil
  works projects entered into by the utility under this paragraph are
  allocated to the number of contracts the municipality that appoints
  the utility's governing board may enter under Subdivision (1); and
                           (ii)  the governing body of the municipality
  must approve the contracts.
         (b)  After the period described by Subsection (a):
               (1)  a local governmental entity with a population of
  500,000 or more may, under this subchapter, enter into contracts
  for not more than six projects in any fiscal year;
               (2)  a local governmental entity with a population of
  100,000 or more but less than 500,000 and a board of trustees under
  Chapter 54, Transportation Code, may, under this subchapter, enter
  into contracts for not more than four projects in any fiscal year;
  and
               (3)  a municipally owned water utility with a separate
  governing board appointed by the governing body of a municipality
  with a population of 500,000 or more may:
                     (A)  independently enter into contracts for not
  more than two civil works projects in any fiscal year; and
                     (B)  enter into contracts for additional civil
  works projects in any fiscal year, but not more than the number of
  civil works projects prescribed by the limit in Subdivision (1) for
  the municipality, provided that:
                           (i)  the additional contracts for the civil
  works projects entered into by the utility under this paragraph are
  allocated to the number of contracts the municipality that appoints
  the utility's governing board may enter under Subdivision (1); and
                           (ii)  the governing body of the municipality
  must approve the contracts.
         SECTION 24.  Sections 262.0271(a), 262.0295(a)(3),
  262.034(b), 262.035, 271.029(b), 271.030, 271.064(b), and 271.065,
  Local Government Code, are repealed.
         SECTION 25.  The changes in law made by this Act apply only
  to purchases made or a bid deadline that occurs on or after
  September 1, 2011. A purchase made or a bid deadline that occurs
  before September 1, 2011, is governed by the law as it existed
  immediately before the effective date of this Act, and that law is
  continued in effect for that purpose.
         SECTION 26.  (a)  The changes in law made by this Act to
  Sections 262.034, 271.029, and 271.064, Local Government Code,
  apply only to an offense committed on or after the effective date of
  this Act. For purposes of this section, an offense is committed
  before the effective date of this Act if any element of the offense
  occurs before that date.
         (b)  An offense committed before the effective date of this
  Act is covered by the law in effect immediately before the effective
  date of this Act, and the former law is continued in effect for that
  purpose.
         SECTION 27.  To the extent of any conflict, this Act prevails
  over another Act of the 82nd Legislature, Regular Session, 2011,
  relating to nonsubstantive additions to and corrections in enacted
  codes.
         SECTION 28.  This Act takes effect September 1, 2011.
 
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