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.