BILL ANALYSIS

C.S.H.B. 875

By: Spiller

Trade, Workforce & Economic Development

Committee Report (Substituted)

BACKGROUND AND PURPOSE

Current law requires all municipal construction projects, regardless of size, to adhere to workers' compensation and bid bonding requirements. The bill author has informed the committee that for smaller projects these requirements can significantly raise costs and discourage qualified small contractors from bidding, and that municipalities may also struggle to find affordable contractors willing to comply with the regulations, resulting in unnecessary delays or inflated costs for taxpayers. C.S.H.B. 875 seeks to ease these requirements for small-scale municipal construction projects in certain municipalities to improve efficiency in local contracting, promote competition, and reduce costs for municipal projects.

CRIMINAL JUSTICE IMPACT

It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.

ANALYSIS

C.S.H.B. 875 amends the Local Government Code to establish that, for a construction project for a municipality with a population of less than 20,000 contracted for an amount that is less than one percent of the total amount of the municipality's most recently adopted budget, the municipality is not required to do the following:

· ensure that the contractor is covered by workers' compensation insurance coverage; or

· require the contractor to obtain a performance bond.

The bill prohibits a municipality, for the purpose of determining the contracted amount of such a construction project, from aggregating work from more than one project. The bill establishes that the term "project" includes all work to be completed on a construction project for a municipality at one location within 12 months of the date the work begins. The bill's provisions apply only to a contract entered into on or after the bill's effective date.

EFFECTIVE DATE

September 1, 2025.

COMPARISON OF INTRODUCED AND SUBSTITUTE

While C.S.H.B. 875 may differ from the introduced in minor or nonsubstantive ways, the following summarizes the substantial differences between the introduced and committee substitute versions of the bill.

The substitute includes a provision absent from the introduced which limits the applicability of the bill's provisions to a municipality with a population of less than 20,000.