SB 36 — To amend Sections 16-13B-1, Section 16-13B-4, and 16-13B-5, Code of Alabama 1975, relating to competitive bidding on contracts of city and county boards of education; to increase the minimum amount for contracts subject to competitive bid from $15,000 to $25,000; and in connection therewith would have as its purpose or effect the requirement of a new or increased expenditure of local funds within the meaning of Section 111.05 of the Constitution of Alabama of 2022.

SB36 INTRODUCEDENGROSSED SBKC58-1SBKC58-2 By Senator Elliott RFD:

07-Mar-23 Page2023 0Regular SBKC58-1Session 02/24/2023Page KMS0 (L)crSB36 2023-551Engrossed 2 4 SYNOPSIS:A BILL TO BE ENTITLED AN ACT 9 To amend Sections 16-13B-1, Section 16-13B-4, and 16-13B-5, Code of Alabama 1975, relating to competitive bidding on contracts of city and county boards of education;

Under existing law, the minimum amount for contracts subject to competitive bid for city and county boards of education is $15,000.

This bill would increase the minimum amount to $25,000.

Section 111.05 of the Constitution of Alabama of 2022, prohibits a general law whose purpose or effect would be to require a new or increased expenditure of local funds from becoming effective with regard to a local governmental entity without enactment by a 2/3 vote unless:

it comes within one of a number of specified exceptions;

it is approved by the affected entity;

or the Legislature appropriates funds, or provides a local source of revenue, to the entity for the purpose.

The purpose or effect of this bill would be to require a new or increased expenditure of local funds within the meaning of the amendment.

However, the bill does not require approval of a local governmental entity or enactment by a 2/3 vote to become effective because it comes within one of the specified exceptions contained in the amendment.

Page 1 SB36 INTRODUCED A BILL TO BE ENTITLED AN ACT To amend Sections 16-13B-1, Section 16-13B-4, and 16-13B-5, Code of Alabama 1975, relating to competitive bidding on contracts of city and county boards of education;

With the exception of contracts for public works whose competitive bidding requirements are governed exclusively by Title 39, all expenditure of funds of whatever nature for labor, services, Page 1 SB36 Engrossed work, or for the purchase of materials, equipment, supplies, or other personal property involving fifteen thousand dollars ($15,000) twenty-five thousand dollars ($25,000) or more, and Page 2 SB36 INTRODUCED the lease of materials, equipment, supplies, or other personal property where the lessee is, or becomes legally and contractually, bound under the terms of the lease, to pay a total amount of fifteen thousand dollars ($15,000) twenty-five thousand dollars ($25,000) or more, made by or on behalf of any city or county board of education, except as hereinafter provided, shall be made under contractual agreement entered into by free and open competitive bidding, on sealed bids, to the lowest responsible bidder.

In the event a bid is received for an item of personal property to be purchased or contracted for from a person, firm, or corporation deemed to be a responsible bidder, having a place of business within the local preference zone where a city or county board of education, thereof is the Page 2 SB36 Engrossed awarding authority, and the bid is no more than three percent greater than the bid of the lowest responsible bidder, the awarding authority may award the contract to the resident Page 3 SB36 INTRODUCED responsible bidder.

(c) The governing bodies of two or more city or county boards of education, or any combination of two or more city or county boards of education, counties, municipalities, or instrumentalities thereof, may provide, by joint agreement, for the purchase of labor, services, or work, or for the purchase or lease of materials, equipment, supplies, or other 95 personal property for use by their respective agencies.

The contracting agencies entering into a joint agreement, as herein permitted, may Page 3 SB36 Engrossed designate a joint purchasing or bidding agent, and the agent shall comply with this chapter.

Purchases, contracts, or agreements made pursuant to a joint purchasing or bidding Page 4 SB36 INTRODUCED agreement shall be subject to all terms and conditions of this chapter.

In the event that utility services are no longer exempt from competitive bidding under this chapter, non-adjoining boards of education may not purchase utility services by joint agreement under authority 95 granted by this subsection.

(d) The awarding authority may require bidders to furnish a bid bond for a particular bid solicitation if the bonding requirement applies to all bidders, is included in the written bid specifications, and if bonding is available for the services, equipment, or materials."materials. "§16-13B-4 (a) All proposed purchases in excess of fifteen thousand dollars ($15,000) twenty-five thousand dollars ($25,000) shall be advertised by posting notice thereof on a bulletin board maintained outside the purchasing office and in any other manner and for any length of time as may be determined.

(e) Beginning October 1, 2027, and every three years thereafter, all dollar amounts used in this chapter shall be subject to a cost adjustment based on the following procedure:

The Chief Examiner of the Department of Examiners of Public Accounts may submit to the Chair of the Legislative Council a recommendation that the amount be increased based on the percentage increase in the Consumer Price Index for the immediately preceding three-year period, rounded to the nearest thousand dollars.

The recommendation shall be subject to the approval of the Legislative Council.

In the event the recommendation is not disapproved by the Legislative Council by the end of April following the submission of the Page 4 SB36 Engrossed recommendation, the recommendation shall be deemed to be approved.

Upon approval, the Department of Examiners of Public Accounts shall notify the public of the adjusted dollar amounts by July 1 before the fiscal year in which the changes will take effect." "§16-13B-4 (a) All proposed purchases in excess of fifteen thousand dollars ($15,000) twenty-five thousand dollars ($25,000) shall be advertised by posting notice thereof on a bulletin board maintained outside the purchasing office and in any other manner and for any length of time as may be determined.

Page 5 SB36 INTRODUCED (b) Except as provided in subsection (c), all bids shall be sealed when received and shall be opened in public at the hour stated in the notice.

provided, however, that a reverse auction shall only be allowed where the item to be purchased at a reverse auction is either not at the time available on the state purchasing program under the Page 5 SB36 Engrossed same terms and conditions or, if available, the lowest price offered in the reverse auction is equal to or less than the price for which the item is available on the state purchasing program under the same terms and conditions.

Page 6 SB36 INTRODUCED (d) All original bids together with all documents pertaining to the award of the contract shall be retained in accordance with a retention period of at least seven years established by the Local Government Records Commission and shall be open to public inspection.

(e) No purchase or contract involving professional services shall be subject to the requirements of this chapter and no purchase or contract involving an amount in excess of Page 6 SB36 Engrossed fifteen thousand dollars ($15,000) twenty-five thousand dollars ($25,000) shall be divided into parts involving amounts of fifteen thousand dollars ($15,000) twenty-five thousand dollars ($25,000) or less for the purpose of avoiding the requirements of this chapter.

Page 7 SB36 INTRODUCED (c) Whoever knowingly and intentionally participates in a collusive agreement in violation of this section involving a bid or bids of over fifteen thousand dollars ($15,000) twenty-five thousand dollars ($25,000) shall be guilty of a Class C felony, and upon conviction shall be punished as prescribed by law." Section 2.

Although this bill would have as its purpose or effect the requirement of a new or increased expenditure of Page 7 SB36 Engrossed local funds, the bill is excluded from further requirements and application under Section 111.05 of the Constitution of Alabama of 2022, because the bill defines a new crime or amends the definition of an existing crime.

Page 8 SB36 Engrossed Senate Read for the first time and referred ................07-Mar-23 to the Senate committee on Finance and Taxation Education Read for the second time and placed ................11-Apr-23 on the calendar:

0 amendments Read for the third time and passed ................25-Apr-23 as amended Yeas 32 Nays 0 Abstains 0 Patrick Harris, Secretary.

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