HBA-MPA C.S.H.B. 1029 76(R)BILL ANALYSIS Office of House Bill AnalysisC.S.H.B. 1029 By: Keffer Urban Affairs 4/18/1999 Committee Report (Substituted) BACKGROUND AND PURPOSE Currently, Texas cities with a population of less than 100,000 are required to solicit sealed bids to provide insurance services valued at over $5,000. This creates a hardship for many small cities, which do not have the staff available to review the submitted proposals or work with the complicated bid process. Moreover, many small cities prefer to do business locally with their taxpayers, and current law makes it extremely difficult for small cities to find local people to go through the bidding process. C.S.H.B. 1029 provides an alternative process for obtaining insurance for a municipality under 100,000. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 252.021(b), Local Government Code, to provide that a municipality with a population less than 100,000 may enter into a contract for insurance that requires an expenditure over $5,000, by negotiating with at least two insurance agents and one intergovernmental risk pool, selecting the insurance contract that is lowest and best, and providing a notice in a general circulation newspaper containing the name and contract amount of the selected insurance carrier or risk pool and the names of other entities making proposals. This procedure is an alternative to complying with the procedure for competitive sealed bidding set out in Chapter 252 (purchasing and Contracting Authority of Municipalities). SECTION 2. Makes application of this Act prospective. SECTION 3. Emergency clause. Effective date: upon passage. COMPARISON OF ORIGINAL TO SUBSTITUTE C.S.H.B. 1029 differs from the original in SECTION 1 by amending Section 252.021(b), rather than (a) and (b). The substitute sets forth an alternative procedure that a municipality with a population under 100,000 may follow in lieu of sealed competitive bidding. The original bill exempted a municipality under 50,000 from the requirement to comply with a procedure requiring competitive sealed bidding or proposals before it can enter into a contract of more than $15,000, and exempted a municipality with a population between 50,000 and 100,000 from the $5,000 insurance contract requirement for sealed competitive bidding. C.S.H.B. 1029 differs from the original by adding a new SECTION 2 to make application of this Act prospective. SECTION 2 (emergency clause) of the original bill is redesignated to SECTION 3 of the substitute.