HBA-LJP H.B. 2962 77(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 2962 By: Longoria State Affairs 3/21/2001 Introduced BACKGROUND AND PURPOSE Currently, when a business is contracted to complete public construction projects, most of the time the business is required to demonstrate its ability to satisfactorily complete the project through a bond or other form of self-insurance in which a business agrees to compensate the state if the project is not completed satisfactorily. Obtaining bonds or insurance for public projects is often difficult for small businesses and may preclude it from bidding successfully on public work. House Bill 2962 requires the General Services Commission and certain state agencies to contract with a surety or another insurer that is required to aggressively assist historically underutilized businesses and small businesses to qualify for a contract. 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. ANALYSIS House Bill 2962 amends the Government Code to require the General Services Commission (GSC) and each state agency whose construction project is exempt from existing law governing state building construction projects to jointly or separately enter into a competitively bid contract with a surety or an appropriate insurer. The bill also provides that the surety or insurer have experience in surety bond support services and requires the surety or insurer to aggressively assist historically underutilized businesses and small businesses to obtain the bonds or insurance required to qualify for a contract or subcontract on a project administered by GSC or another agency. The bill requires GSC and an agency whose project is exempted to require a contractor or subcontractor to meet part or all of the bonding or insurance requirements for the project. The bill sets forth provisions relating to the renewal and content of the contracts. The bill requires GSC or the state agency entering into a contract with a surety or insurer to conduct annual program audits and performance reviews under the contract. EFFECTIVE DATE September 1, 2001.