HBA-MPA H.B. 3588 76(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 3588
By: Alexander
Transportation
3/30/1999
Introduced



BACKGROUND AND PURPOSE 

Subject to a list of narrow exceptions, governmental entities in Texas,
including the Dallas/Fort Worth International Airport (DFW) Board, are
required to publicly and competitively bid any contract involving an
expenditure of more than $15,000.  This has created problems for joint
airport boards in trying to control the development of airport property.
In particular, the need for the DFW board to meet a potential customers'
needs to occupy a development in an expedited time frame forced the airport
to look at new ways of financing, contracting, and building projects.
Alternatively, airports were faced with surrendering substantial control of
airport development to their tenants. Consequently, the Airport Development
Team and the concept of a guaranteed maximum price contract were developed.
In 1989, the DFW board succeeded in obtaining legislation (Section 22.084,
Transportation Code) that allows it to exempt certain construction projects
from the otherwise applicable competitive bid laws. 

Although the legislation was designed to include construction projects that
were funded by a wide variety of funding mechanisms including joint revenue
bonds, the wording of the legislation was unintentionally altered.  The
resulting legislation has led to confusion as to what type of financing is
permissible in these particular construction contracts.  One legal
interpretation is that only those projects which are funded at least in
part from bond proceeds are exempt from the public bid laws. Federal law
still requires competitive bidding for any project over $25,000, but this
bill will allow joint airport boards to exempt the use of passenger
facility charges, airline trust funds, airport capital improvement funds,
and public safety seized funds for projects and exempt them up to the
federal limit from competitive bidding requirements. 

H.B. 3588 clarifies a joint airport board's ability to exempt certain
contracts from the competitive bids statute regardless of the type of
funding used.  

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 22.084(a), Transportation Code, as follows:

Sec. 22.084. AIRPORT REVENUE AND REVENUE BOND PROCEEDS; CONTRACTING
OPPORTUNITIES FOR MINORITY- AND WOMEN-OWNED BUSINESSES. (a) By reorganizing
this subsection, clarifies the ability of a joint board to enter an
agreement to spend the proceeds of revenue bonds issued by its constituent
agencies, the proceeds of bonds issued by a nonprofit agency created under
Section 22.152 (Nonprofit Airport Facility Financing Corporations), and any
other airport income or revenue  for the planning, construction, or
acquisition of facilities authorized by Sections 22.011(a)-(c) (General
Powers Regarding Airports and Air Navigation Facilities) and 22.012
(Financing of Airport Facilities), without inviting, advertising for, or
otherwise requiring competitive bids.    

SECTION 2.Emergency clause.
  Effective date: upon passage.