HBA-DMD H.B. 3186 76(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 3186 By: Longoria State Affairs 4/4/1999 Introduced BACKGROUND AND PURPOSE Currently, on most public work, the state requires that a business demonstrate its ability to satisfactorily complete the job it was contracted to do through a bond, which is a form of selfinsurance in which a business agrees to compensate the state if the job is not done correctly. Obtaining these bonds may prove difficult for a small business and may preclude it from successfully bidding on public work. H.B. 3186 authorizes the General Services Commission (commission) or other agency to negotiate an arrangement with a surety or an insurer, in order to furnish bonds, insurance, or both, that a contractor or subcontractor is required to execute or carry to receive a contract or subcontract on a project administered by the commission or other agency. This bill requires the commission or other agency to require a contractor or subcontractor to meet part or all of the bonding or insurance requirements for the project. 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 2166.258, Government Code, to authorize the General Services Commission (commission) or an agency whose project is exempted from all or part of this chapter under Section 2166.003 (Exemptions), Government Code, to negotiate an arrangement with a surety or an insurer that has experience in surety bond support services and owner controlled insurance programs, in order to furnish bonds, insurance, or both that a contractor or subcontractor is required to execute or carry to receive a contract or subcontract on a project administered by the commission or other agency. Requires the commission or other agency to require a contractor or subcontractor to meet part or all of the bonding or insurance requirements for the project under the arrangement negotiated by the commission or other agency, notwithstanding Section 1, Chapter 87, Article 7.191, Insurance Code. Sets forth that it is the will of the legislature that administration of this program be put up for public, competitive bid and that the contract be renewed each biennium. Provides that the recipient of this contract will be charged with running the program but must demonstrate capability to report performance measures and be subjected to annual reviews and audits. SECTION 2.Emergency clause. Effective date: 90 days after adjournment.