2017 LEGISLATIVE UPDATE. Revised As of August 2, 2017

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1 2017 LEGISLATIVE UPDATE PURCHASING BILLS WHICH PASSED THE 85 TH TEXAS LEGISLATURE Revised As of August 2, 2017 Presented by Pam Kirkland, CPPO, CPPB TXPPA Legislative Chair Purchasing Agent, City of Plano, Texas

2 54 TOTAL PURCHASING RELATED BILLS MONITORED BY TXPPA Reporting Federal Grants (HB135, SB446) Various Preferences (SB60) Collective Bargaining (SB452, HB648) Verifying Wages (HB3357) Disclosure of Public Information (SB407, HB792, SB425, HB839) Safety Training of Construction Employees (HB863, SB475) E-verify for Contractors (HB1453, SB23, SB85, SB254) Procurement Notices (HB1541, HB1759, SB623) Disclosure of Interested Parties (HB1295, HB1610)) Prequalification of Construction Companies (HB3250) Job Order Contracting (HB3326) Worker s Compensation for Contractors (HB1477, SB474) 33 HOUSE BILLS 23 did not move/left pending in committee 7 moved some 3 passed 21 SENATE BILLS 13 did not move/left pending in committee 3 moved some 4 passed 1 vetoed 8 TOTAL PURCHASING RELATED BILLS PASSED 3 House bills 5 Senate bills

3 PURCHASING RELATED BILLS WHICH PASSED HB 89 Co- Relating to state contracts with and investments in companies that boycott Israel. King, Phil, Goldman, Davis, Sarah Anderson, Charles, Bohac, Burkett, Burns, Cain, Cosper, Cyrier, Dale, Dean, Hefner, Holland, Isaac, Klick, Drause, Lambert, Lang, Larson, Laubenberg, Leach, Miller, Rick, Morrison, Murphy, Oliverson, Parker, Paul, Rinaldi, Roberts, Schofield, Shine, Simmons, Springer, Stephenson, Strickland, Stucky, Swanson, Thompson, Ed, Tinderholt, White, Workman, Zedler Affected Statutes: Government Code, Chapter 2270 Adds Chapter 2270 to the Subtitle F, Title 10, Government Code to prohibit governmental entities (which includes cities, counties, public school, special purpose districts, etc.) from contracting with companies who boycott Israel and from investing in companies that boycott Israel. Requires contracts to have written verification from the company that it does not boycott Israel and will not boycott Israel during the term of the contract. The Comptroller shall prepare and maintain a list of companies that boycott Israel more and more and more. SB 134 Identical and SB 29 - Identical The Comptroller will have to prepare and maintain a list of companies that boycott Israel for use by governmental entities. Governmental entities will be required to include a clause in all contracts stating the company does not boycott Israel. Review with your City Attorney.

4 HB 1116 Relating to the repeal of certain state procurement advisory and approval procedures. Kacal, Shaheen Affected Statutes: Government Code 2155 Purchasing General Rules and Procedures Repeals Section Relative to procedures for awarding certain contracts and abolishes the statewide procurement advisory council. SB 632 Identical Should not have an impact on anyone other than State procurement officials.

5 HB 1571 Relating to the use of local government energy savings performance contracts for measures that avoid expected future operating or maintenance costs. Paddie Affected Statutes: Government Code, Section 302 SB Identical Requires political subdivisions (includes all local governments, cities, counties, school districts, special districts) to include the estimated amount of avoided expected future operating and maintenance costs in evaluating energy savings. (I.e. in addition to considering the fuel costs, energy costs, water costs, storm water fees, etc.). Actions: SIGNED BY THE GOVERNOR EFFECTIVE IMMEDIATELY (August 28, 2017) Will be of interest for those entities negotiating energy contracts, which includes more than just electricity.

6 SB 252 Relating to prohibiting governmental contracts with a company doing business with Iran, Sudan, or a foreign terrorist organization. Taylor, Van Affected Statutes: Government Code 2252 Contracting w/governmental Entities Terrorists. The bill would provide that a (1) a governmental entity, ( includes cities, counties, school districts and special districts), may not enter into a governmental contract with a company that does business with Iran, Sudan, or any known terrorist organization; and (2) the comptroller shall prepare and maintain and make available to each governmental entity, a list of companies known to have contracts with or provide supplies or services to a foreign terrorist organization. HB Identical What is the difference in this one and HB89?

7 SB 262 Relating to certain DIR purchases by state agencies. Zaffirini Affected Statutes: Government Code 2157 Purchase of Automated Information Systems Only applicable for State agencies SECTION 1. Amends Section , Government Code, by adding Subsection (k), as follows: (k) Requires the Department of Information Resources (DIR), in cooperation with state agencies, to, with respect to the purchase of commodity items included in the list maintained under Subsection (e) (relating to requiring DIR to compile a list of certain commodity items available for purchase through DIR): (1) periodically assess the risk to this state in the purchase of those commodity items; and (2) based on that risk assessment and as DIR considers necessary to ensure accuracy, monitor and verify the purchase transaction reports of the monthly sales of those commodity items submitted by vendors in accordance with DIR requirements. SECTION 2. Amends Section (a), Government Code, as follows: (a) Authorizes a state agency or local government, except as provided by this subsection, to purchase goods or services directly from a vendor under a contract listed on a schedule developed under this subchapter (Multiple Award Contract Schedule). Requires a state agency or local government contracting for the purchase of an automated information system under a contract listed on a schedule developed under this subchapter to comply with Section (e-1) (relating to certain value amounts determining how a state agency contracts to purchase a commodity item). Provides that a purchase authorized by this section satisfies any requirement of state law relating to competitive bids or proposals. Deletes existing text providing that a purchase authorized by this section satisfies any requirement of state law relating to competitive bids or proposals and satisfies any applicable requirements of Chapter 2157 (Purchasing: Purchase of Automated Information Systems). SECTION 3. Provides that the changes in law made by this Act apply only in relation to a contract for which a state agency or local government first advertises or otherwise solicits bids, proposals, offers, or qualifications on or after the effective date of this Act; that is extended on or after the effective date of this Act; or for which a change order is submitted on or after the effective date of this Act.

8 PLEASE NOTE: The following information was provided by DIR: The Department of Information Resources (DIR) has received inquiries concerning Senate Bill 262 (SB 262) of the 85th Legislative Session that becomes law on September 1, A clear reading of SB 262, Section 2, is that the section of the legislation in question relates to the purchase of automated information systems through Texas Multiple Award Schedule (TXMAS) contracts, not through the DIR cooperative contracts program. Local governments purchasing through DIR s cooperative contracts program do not have to comply with thresholds defined in Section , Texas Government Code, because the thresholds only apply to state agencies, and local governments are not statutorily defined as a state agency. While the majority of TXMAS contracts are managed by the Statewide Procurement Division (SPD) of the Texas Comptroller of Public Accounts, DIR has 3 TXMAS contracts for automated information systems: Onix Networking - TXMAS Onix Networking offers Google Branded Equipment and related services through this contract. Available brands include: Google. This is a GSA contract. Contracts may be used by state and local government, public education, other public entities in Texas, as well as public entities outside the state. Resellers are not available for this contract. GSA Contract: GS- 35F-5519H Executive Information Systems, LLC - DIR-TSO-2521 Executive Information Systems offers SAS software and technical services through this TXMAS contract. Available services and products include text miner, restricted use infrastructure server software, and many others. Contracts may be used by state and local government, public education, other public entities in Texas, as well as public entities outside the state. Resellers are not available for this contract. K2Share, LLC. - DIR-TSO-2837 K2Share offers technical services through this TXMAS contract. Available services and products include web application development, network security, database administration and support services and many others. Contracts may be used by state and local government, public education, other public entities in Texas, as well as public entities outside the state. Resellers are not available for this contract. In accordance with SB 262, a state agency or local government contracting for the purchase of an automated information system under these three DIR contracts shall comply with Section (e- 1), also effective September 1, To reiterate, SB 262, Section 2, only applies to the three contracts listed above. For all other purchases under a DIR cooperative contract, the price request thresholds found at Sections (e-1) do not apply to local governments. Please feel free to contact DIR with any questions or concerns, especially if any local government entities intend to use the TXMAS contracts above.

9 SB 807 Relating to choice of law and venue for certain construction contracts. Creighton HB 1844 Identical Affected Statutes: Business & Commerce Code, Chapter 272 Laws Applicable to Certain Contracts for Construction or Repair of Real Property Improvements This bill adds construction contracts to the types of contracts where venue and choice of law would be restricted to Texas in the case of conflict resolution and/or litigation. Should not be an issue as most entities currently require Texas to be the choice of law in contracts. Review with your City Attorney.

10 SB 1289 Relating to the purchase of iron and steel products made in the United States for certain governmental entity projects. Creighton Affected Statutes: Government Code 2252 Contracting w/government Entities Effective: September 1, 2017 HB Identical State only unless cities/counties/schools are using state funds. The bill would amend Chapter 2252 regarding contracts with government entities, to require state entities with projects relating to the construction, remodeling, or altering of a building, a structure, or infrastructure, including a road or highway, or who supply a material for such projects, to source iron or steel products used in such projects from the US. The bill would permit exceptions if these products are not produced in sufficient quantities in the US or if the use of products produced in the US will increase the total cost of the project by more than 20 percent. No impact on cities, counties or schools unless state funding is involved.

11 SB 1215 Relating to responsibility for the consequences of defects in the plans, specifications, or related documents for the construction or repair of an improvement to real property. Hughes Affected Statutes: Business & Commerce Code Adds Chapter 59 Actions: The bill provides that a builder is not responsible for the consequences of defects in, and is not to be required to warranty the accuracy, adequacy, sufficiency, or suitability of, plans, specifications, or other design or bid documents provided to the builder by the person with whom the builder has entered into a construction contract. Also prevents an owner from requiring a builder to waive this protection by contract. PASSED THE HOUSE AND SENATE BUT WAS VETOED BY THE GOVERNOR ON GOVERNORS VETO MESSAGE: Senate Bill 1215 creates a joint interim committee of the Legislature to study construction contracts. The House and Senate can, and do, study topics in the interim without passage of a law. Legislation mandating legislative studies and legislative interim committees is unnecessary. The Legislature is free to study construction contracts with or without this bill.