Texas House Bill HB707

Texas 2009 - 81st Regular

Caption

Relating to the award of certain municipal contracts.

Impact

The proposed changes in HB 707 are expected to promote economic development within smaller cities by creating opportunities for local businesses to compete more effectively against larger, non-resident firms. By allowing these municipalities to consider factors beyond just price—the employment of local residents and the potential for increased local tax revenue—this bill could lead to a stronger economic foundation in smaller communities. The law is anticipated to bolster local employment rates and service provision by incentivizing municipalities to collaborate with hometown businesses.

Summary

House Bill 707 is designed to modify the process governing municipal contracts in Texas, particularly focusing on enhancing competition among local bidders. The bill states that municipalities with populations under 250,000 can prioritize bids from businesses located within their boundaries if those bids are within five percent of the lowest competing bid from outside the municipality. This legislative effort aims to stimulate local economies by favoring resident businesses while allowing municipalities some flexibility in awarding contracts based on additional economic benefits offered by local bidders.

Contention

However, there are potential points of contention regarding HB 707. Critics may argue that prioritizing local bidders could detract from the principle of obtaining the best price for taxpayers. There is an inherent risk that by favoring local bids, municipalities may inadvertently compromise on the quality of service or products received if local businesses are unable to compete on price or operational capabilities. Additionally, opponents could contend that this practice could foster a sense of exclusivity and limit opportunities for larger, often more capable firms from outside the municipality who might offer better pricing or services.