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.