HBA-ALS H.B. 1746 76(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 1746 By: Flores State Affairs 4/4/1999 Introduced BACKGROUND AND PURPOSE Since the inception of the historically underutilized business (HUB) program, the legislature has routinely established guidelines for the program in Article IX of the General Appropriations Act (Appropriations Act). However, some courts have recently struck down provisions of the Appropriations Act, holding it unconstitutional to legislate through the Appropriations Act. H.B.1746 codifies specific provisions which are currently contained in Article IX relating to the state contracting with HUB. Under the current HUB program, each state agency is required to prepare in its strategic plan, a plan for increasing the agency's use of HUBs in purchasing and public works contracting. This bill requires the General Services Commission (commission) to adopt rules for the administration of the HUB program which apply to state agency construction projects and purchases of goods and services. This bill sets forth rules, reporting requirements, and implementation guidelines relating to an agency's plan to increase the use of HUBs in its construction projects and its purchase of goods and services. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that rulemaking authority previously delegated to the General Services Commission (commission) is modified in SECTION 2 (Section 2161.002, Government Code) and is expressly delegated to the commission in SECTIONS 6 and 7 (Sections 2161.181 and 2161.182, Government Code). SECTION BY SECTION ANALYSIS SECTION 1. Amends Sections 2161.001(2) and (3), Government Code, to redefine "historically underutilized business" (HUB). SECTION 2. Amends Section 2161.002, Government Code, by adding Subsection (c) to require the General Services Commission (commission) to adopt rules to administer this chapter based on the results of the disparity study prepared by the Comptroller of Public Accounts (comptroller) under Section 101, Article V, Chapter 1051, Acts of the 73rd Legislature, Regular Session, 1993 (General Appropriations Act) (disparity study). Requires the commission to revise the rules in response to the findings of the latest similar disparity study. SECTION 3. Amends Subchapter A, Chapter 2161, Government Code, by adding Sections 2161.003, 2161.004, and 2161.005, as follows: Sec. 2161.003. AGENCY RULES. Requires a state agency, including a higher education institution, to adopt the commission's rules under Section 2161.002 as its own rules. Provides that those rules apply to the agency's construction projects and purchases of goods and services regardless of whether the project or purchase is otherwise subject to this subtitle. Sec. 2161.004. APPLICABILITY. Provides that this chapter and rules adopted by the commission pursuant to this chapter apply to state agency construction projects and purchases of goods and services made that are under the authority of this subtitle or other law. Sec. 2161.005. REVOCATION OF DELEGATED PURCHASING AUTHORITY. (a) Authorizes the commission to revoke any purchasing authority it delegates to an agency if: _ the state auditor (auditor) reports to the commission under Section 2161.123(d) that the state agency is not complying with Section 2161.123 or not making a good faith effort to implement the plan adopted under that section and _ the commission determines one year after the auditor's report that the agency is still either not in compliance or making a good faith effort to implement the plan. (b) Authorizes the comptroller to consider the commission's revocation of an agency's delegated purchasing authority if the commission needs a transfer of the agency's appropriated funds to cover the cost of assuming the agency's purchasing functions. Requires the Legislative Budget Board to determine the amount transferred from the agency's funds to the commission. SECTION 4. Amends Section 2161.122, Government Code, to require state agencies to report to the commission pursuant to Section 2161.125 (Strategic Planning) specified information relating to HUB expenditures of treasury and nontreasury funds. Redesignates existing Subsections (c) and (d) to Subsections (d) and(c), respectively. SECTION 5. Amends Section 2161.123, Government Code, by adding Subsections (d) and (e), as follows: (d) Requires the auditor to report to the commission a state agency that is not complying with this section or not making a good faith effort to implement the plan. Requires the auditor to consider specified factors in determining whether a state agency is making a good faith effort. (e) Requires, if the auditor reports that the agency is not complying with this section or making a good faith effort to comply with the plan adopted under this section, the commission to assist the agency in doing so. SECTION 6. Amends Section 2161.181, Government Code, to require the commission, by rule, to establish the state's percentage goals for the purchase of goods or services from HUBs based on the results of the disparity study or on a later relevant disparity study prepared on behalf of state government. Requires a state agency to make a good faith effort to assist HUBs to receive a percentage, rather than at least 30 percent, of the agency's total expected value of all contract awards for the purchase of goods or services during a fiscal year that meets or exceeds the goal established by the commission. SECTION 7. Amends Section 2161.182(a), Government Code, to require the commission, by rule, to establish the state's percentage goals for the total value of each state agency construction contract award that should be received by HUBs based on the disparity study or on a later relevant disparity study prepared on behalf of state government. Makes conforming changes. SECTION 8. Amends Section 325.011, Government Code, to require the commission and its staff to consider the extent to which the agency has complied with applicable state law and rules of any agency regarding purchasing goals and programs for HUBs in determining whether there is a public need for the continuation of a state agency or its advisory committees or for the performance of its functions. SECTION 9.Effective date: September 1, 1999. SECTION 10.Emergency clause.