Honorable Cecil Bell, Chair, House Committee on Intergovernmental Affairs
FROM:
Jerry McGinty, Director, Legislative Budget Board
IN RE:
HB4314 by Bell, Cecil (relating to prohibiting certain criteria in a local governmental agency contractor selection process.), Committee Report 1st House, Substituted
Estimated Two-year Net Impact to General Revenue Related Funds for HB4314, Committee Report 1st House, Substituted: a negative impact of ($3,153,916) through the biennium ending August 31, 2027.
General Revenue-Related Funds, Five- Year Impact:
Fiscal Year
Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2026
($1,727,395)
2027
($1,626,149)
2028
($1,626,149)
2029
($1,626,149)
2030
($1,626,149)
All Funds, Five-Year Impact:
Fiscal Year
Probable Savings/(Cost) from General Revenue Fund 1
Change in Number of State Employees from FY 2025
2026
($1,727,395)
13.0
2027
($1,626,149)
13.0
2028
($1,626,149)
13.0
2029
($1,626,149)
13.0
2030
($1,626,149)
13.0
Fiscal Analysis
The bill would prohibit the use of certain criteria in a local governmental agency's contractor selection process. The bill would allow individuals to submit complaints to the Office of the Attorney General regarding suspected violations of the bill. The bill would require the OAG to direct government entities to remove prohibited criteria if they are found to be in violation during the procurement process. If a contract has been awarded but not yet executed or completed, the OAG would be required to direct the entity to terminate the contract.
A contract would be rendered void by law if the governmental agency fails to comply with the OAG's request. The OAG would be authorized to bring an action for injunctive or declaratory relief against agencies that do not comply.
Methodology
The OAG anticipates a large volume of procurement complaints as a result of the bill. The agency predicts an average of two complaints per government entity per fiscal year and indicates that there are approximately 3,486 entities that could be subject to the requirements of the bill in the state.
The OAG anticipates there would be a need to establish a procurement control group consisting of 13.0 new FTEs to handle the anticipated volume of complaints. This would include: 1.0 Assistant Attorney General VI, 2.0 Assistant Attorney General IV, 2.0 Assistant Attorney General III, 1.0 Manager II, 2.0 Contract Specialist IV, 3.0 Contract Specialist III, 1.0 Legal Assistant II, and 1.0 Administrative Assistant II. The cost for the new FTEs including salaries and wages, benefits, and other operating expenses is estimated to be $1,557,120 per fiscal year.
Additionally, the agency anticipates a onetime equipment cost of $39,676 in fiscal year 2026.
Technology
The OAG anticipates a onetime technology cost of $61,570 in fiscal year 2026 for laptops, software and related equipment. Ongoing technology costs are estimated to be $69,029 per fiscal year for data center services and voice lines.
Local Government Impact
Local entities may be required to void or terminate a contract or procurement process if they are found to be in violation by the OAG.