BILL ANALYSIS C.S.H.B. 4314 By: Bell, Cecil Intergovernmental Affairs Committee Report (Substituted) BACKGROUND AND PURPOSE The bill author has informed the committee that some cities are prioritizing environmental, social, and governance standards when considering vendors for city contracts. C.S.H.B. 4314 seeks to ensure that such contracts are awarded based solely on objective criteria like cost, quality, reliability, or legal compliance by prohibiting the use of certain criteria in a local governmental agency contractor selection process. CRIMINAL JUSTICE IMPACT It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution. ANALYSIS C.S.H.B. 4314 amends the Local Government Code to prohibit a governmental agency, defined by reference as a municipality, county, school district, conservation and reclamation district, hospital organization, or other political subdivision of the state, that procures a good or service through a competitive process from doing the following: considering any factor in the procurement process other than a factor that is required by law or is objective, measurable, and directly related to the cost, quality, reliability, or legal compliance of the good or service being procured; or giving a preference to a bid based on environmental, social, and governance criteria that do not directly relate to the cost, quality, reliability, or legal compliance of the good or service being procured. The bill requires a governmental agency, for a competitive procurement process, to provide written contract selection criteria in all publicly available bid specification requirements and to include written contract selection criteria in the solicitation documents at the time of vendor solicitation. C.S.H.B. 4314 authorizes a person to submit to the attorney general a suspected violation of the bill's provisions. The bill sets out the following requirements that apply if the attorney general determines that a governmental agency has violated the bill's provisions: if the procurement process is ongoing and a contract has not been awarded, the attorney general must direct the governmental agency in writing to remove any contract selection criteria that the attorney general determines are prohibited under the bill's provisions; or if a contract has been awarded but has not been executed or performance of the contract has not been completed: o the attorney general must direct the governmental agency in writing to terminate the contract not later than the 10th day after the date the governmental agency receives the notice; and o the governmental agency must provide written proof of the termination of the contract to the attorney general within that period. If contract termination is required and the governmental agency fails to terminate the contract or provide written proof of the termination of a contract to the attorney general within the applicable period, the contract is void. The bill authorizes the attorney general to bring an action for injunctive or declaratory relief to enforce the bill's provisions if a governmental agency fails to comply with those provisions. C.S.H.B. 4314 applies only to a contractor selection process initiated on or after the bill's effective date. EFFECTIVE DATE September 1, 2025. COMPARISON OF INTRODUCED AND SUBSTITUTE While C.S.H.B. 4314 may differ from the introduced in minor or nonsubstantive ways, the following summarizes the substantial differences between the introduced and committee substitute versions of the bill. The substitute omits the provisions from the introduced prohibiting a political subdivision from disqualifying in any way a vendor in a contractor selection process because the vendor is a company, as defined by the introduced, that engages in the exploration, production, use, transportation, sale, or manufacturing of fossil fuel-based energy or invests in, assists in, or does business with such a company. The substitute includes instead provisions that did not appear in the introduced prohibiting a governmental agency, defined by reference as a municipality, county, school district, conservation and reclamation district, hospital organization, or other political subdivision of the state, that procures a good or service through a competitive process from doing the following: considering any factor in the procurement process other than a factor that is required by law or is objective, measurable, and directly related to the cost, quality, reliability, or legal compliance of the good or service being procured; or giving a preference to a bid based on environmental, social, and governance criteria that do not directly relate to the cost, quality, reliability, or legal compliance of the good or service being procured. The substitute includes the following provisions absent from the introduced: a provision requiring a governmental agency, for a competitive procurement process, to provide written contract selection criteria in all publicly available bid specification requirements and to include written contract selection criteria in the solicitation documents at the time of vendor solicitation; the authorization for a person to submit to the attorney general a suspected violation of the bill's provisions; provisions providing for the removal of prohibited contract selection criteria or contract termination, as applicable, if the attorney general determines that a governmental agency has violated the bill's provisions; a provision establishing the circumstances under which a contract is void due to a governmental agency's noncompliance with contract termination requirements; and the authorization for the attorney general to bring an action for injunctive or declaratory relief to enforce the bill's provisions if a governmental agency fails to comply with those provisions.
BILL ANALYSIS
# BILL ANALYSIS
C.S.H.B. 4314
By: Bell, Cecil
Intergovernmental Affairs
Committee Report (Substituted)
C.S.H.B. 4314
By: Bell, Cecil
Intergovernmental Affairs
Committee Report (Substituted)
BACKGROUND AND PURPOSE The bill author has informed the committee that some cities are prioritizing environmental, social, and governance standards when considering vendors for city contracts. C.S.H.B. 4314 seeks to ensure that such contracts are awarded based solely on objective criteria like cost, quality, reliability, or legal compliance by prohibiting the use of certain criteria in a local governmental agency contractor selection process.
CRIMINAL JUSTICE IMPACT It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.
RULEMAKING AUTHORITY It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.
ANALYSIS C.S.H.B. 4314 amends the Local Government Code to prohibit a governmental agency, defined by reference as a municipality, county, school district, conservation and reclamation district, hospital organization, or other political subdivision of the state, that procures a good or service through a competitive process from doing the following: considering any factor in the procurement process other than a factor that is required by law or is objective, measurable, and directly related to the cost, quality, reliability, or legal compliance of the good or service being procured; or giving a preference to a bid based on environmental, social, and governance criteria that do not directly relate to the cost, quality, reliability, or legal compliance of the good or service being procured. The bill requires a governmental agency, for a competitive procurement process, to provide written contract selection criteria in all publicly available bid specification requirements and to include written contract selection criteria in the solicitation documents at the time of vendor solicitation. C.S.H.B. 4314 authorizes a person to submit to the attorney general a suspected violation of the bill's provisions. The bill sets out the following requirements that apply if the attorney general determines that a governmental agency has violated the bill's provisions: if the procurement process is ongoing and a contract has not been awarded, the attorney general must direct the governmental agency in writing to remove any contract selection criteria that the attorney general determines are prohibited under the bill's provisions; or if a contract has been awarded but has not been executed or performance of the contract has not been completed: o the attorney general must direct the governmental agency in writing to terminate the contract not later than the 10th day after the date the governmental agency receives the notice; and o the governmental agency must provide written proof of the termination of the contract to the attorney general within that period. If contract termination is required and the governmental agency fails to terminate the contract or provide written proof of the termination of a contract to the attorney general within the applicable period, the contract is void. The bill authorizes the attorney general to bring an action for injunctive or declaratory relief to enforce the bill's provisions if a governmental agency fails to comply with those provisions. C.S.H.B. 4314 applies only to a contractor selection process initiated on or after the bill's effective date.
EFFECTIVE DATE September 1, 2025.
COMPARISON OF INTRODUCED AND SUBSTITUTE While C.S.H.B. 4314 may differ from the introduced in minor or nonsubstantive ways, the following summarizes the substantial differences between the introduced and committee substitute versions of the bill. The substitute omits the provisions from the introduced prohibiting a political subdivision from disqualifying in any way a vendor in a contractor selection process because the vendor is a company, as defined by the introduced, that engages in the exploration, production, use, transportation, sale, or manufacturing of fossil fuel-based energy or invests in, assists in, or does business with such a company. The substitute includes instead provisions that did not appear in the introduced prohibiting a governmental agency, defined by reference as a municipality, county, school district, conservation and reclamation district, hospital organization, or other political subdivision of the state, that procures a good or service through a competitive process from doing the following: considering any factor in the procurement process other than a factor that is required by law or is objective, measurable, and directly related to the cost, quality, reliability, or legal compliance of the good or service being procured; or giving a preference to a bid based on environmental, social, and governance criteria that do not directly relate to the cost, quality, reliability, or legal compliance of the good or service being procured. The substitute includes the following provisions absent from the introduced: a provision requiring a governmental agency, for a competitive procurement process, to provide written contract selection criteria in all publicly available bid specification requirements and to include written contract selection criteria in the solicitation documents at the time of vendor solicitation; the authorization for a person to submit to the attorney general a suspected violation of the bill's provisions; provisions providing for the removal of prohibited contract selection criteria or contract termination, as applicable, if the attorney general determines that a governmental agency has violated the bill's provisions; a provision establishing the circumstances under which a contract is void due to a governmental agency's noncompliance with contract termination requirements; and the authorization for the attorney general to bring an action for injunctive or declaratory relief to enforce the bill's provisions if a governmental agency fails to comply with those provisions.
BACKGROUND AND PURPOSE
The bill author has informed the committee that some cities are prioritizing environmental, social, and governance standards when considering vendors for city contracts. C.S.H.B. 4314 seeks to ensure that such contracts are awarded based solely on objective criteria like cost, quality, reliability, or legal compliance by prohibiting the use of certain criteria in a local governmental agency contractor selection process.
CRIMINAL JUSTICE IMPACT
It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.
RULEMAKING AUTHORITY
It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.
ANALYSIS
C.S.H.B. 4314 amends the Local Government Code to prohibit a governmental agency, defined by reference as a municipality, county, school district, conservation and reclamation district, hospital organization, or other political subdivision of the state, that procures a good or service through a competitive process from doing the following:
considering any factor in the procurement process other than a factor that is required by law or is objective, measurable, and directly related to the cost, quality, reliability, or legal compliance of the good or service being procured; or
giving a preference to a bid based on environmental, social, and governance criteria that do not directly relate to the cost, quality, reliability, or legal compliance of the good or service being procured.
The bill requires a governmental agency, for a competitive procurement process, to provide written contract selection criteria in all publicly available bid specification requirements and to include written contract selection criteria in the solicitation documents at the time of vendor solicitation.
C.S.H.B. 4314 authorizes a person to submit to the attorney general a suspected violation of the bill's provisions. The bill sets out the following requirements that apply if the attorney general determines that a governmental agency has violated the bill's provisions:
if the procurement process is ongoing and a contract has not been awarded, the attorney general must direct the governmental agency in writing to remove any contract selection criteria that the attorney general determines are prohibited under the bill's provisions; or
if a contract has been awarded but has not been executed or performance of the contract has not been completed:
o the attorney general must direct the governmental agency in writing to terminate the contract not later than the 10th day after the date the governmental agency receives the notice; and
o the governmental agency must provide written proof of the termination of the contract to the attorney general within that period.
If contract termination is required and the governmental agency fails to terminate the contract or provide written proof of the termination of a contract to the attorney general within the applicable period, the contract is void. The bill authorizes the attorney general to bring an action for injunctive or declaratory relief to enforce the bill's provisions if a governmental agency fails to comply with those provisions.
C.S.H.B. 4314 applies only to a contractor selection process initiated on or after the bill's effective date.
EFFECTIVE DATE
September 1, 2025.
COMPARISON OF INTRODUCED AND SUBSTITUTE
While C.S.H.B. 4314 may differ from the introduced in minor or nonsubstantive ways, the following summarizes the substantial differences between the introduced and committee substitute versions of the bill.
The substitute omits the provisions from the introduced prohibiting a political subdivision from disqualifying in any way a vendor in a contractor selection process because the vendor is a company, as defined by the introduced, that engages in the exploration, production, use, transportation, sale, or manufacturing of fossil fuel-based energy or invests in, assists in, or does business with such a company. The substitute includes instead provisions that did not appear in the introduced prohibiting a governmental agency, defined by reference as a municipality, county, school district, conservation and reclamation district, hospital organization, or other political subdivision of the state, that procures a good or service through a competitive process from doing the following:
considering any factor in the procurement process other than a factor that is required by law or is objective, measurable, and directly related to the cost, quality, reliability, or legal compliance of the good or service being procured; or
giving a preference to a bid based on environmental, social, and governance criteria that do not directly relate to the cost, quality, reliability, or legal compliance of the good or service being procured.
The substitute includes the following provisions absent from the introduced:
a provision requiring a governmental agency, for a competitive procurement process, to provide written contract selection criteria in all publicly available bid specification requirements and to include written contract selection criteria in the solicitation documents at the time of vendor solicitation;
the authorization for a person to submit to the attorney general a suspected violation of the bill's provisions;
provisions providing for the removal of prohibited contract selection criteria or contract termination, as applicable, if the attorney general determines that a governmental agency has violated the bill's provisions;
a provision establishing the circumstances under which a contract is void due to a governmental agency's noncompliance with contract termination requirements; and
the authorization for the attorney general to bring an action for injunctive or declaratory relief to enforce the bill's provisions if a governmental agency fails to comply with those provisions.