Washington State House of Representatives Office of Program Research | BILL ANALYSIS |
Local Government Committee |
ESSB 5110
This analysis was prepared by non-partisan legislative staff for the use of legislative members in their deliberations. This analysis is not a part of the legislation nor does it constitute a statement of legislative intent. |
Brief Description: Concerning local government purchasing of supplies, materials, or equipment.
Sponsors: Senate Committee on Governmental Operations (originally sponsored by Senators Tom, Murray, Hill and McAuliffe).
Brief Summary of Engrossed Substitute Bill |
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Hearing Date: 3/14/13
Staff: Michaela Murdock (786-7289).
Background:
Generally, purchases of or contracts for goods and services must be based on a competitive solicitation process, unless a specific exemption applies. Bids submitted in a competitive solicitation process are reviewed by the requesting agency, and the agency may either: (1) reject all bids and rebid, or cancel the competitive solicitation; (2) request best and final offers from responsive and responsible bidders; or (3) award the purchase or contract to the lowest responsive and responsible bidder.
Consideration of Tax Revenue from Local Suppliers.
When local governments are required to make purchases from the lowest bidder or from the supplier offering the lowest price, they may take into consideration tax revenue they would receive from purchasing supplies, materials, or equipment from a supplier located within their jurisdiction. The term "local governments" refers to any county, city, town, metropolitan municipal corporation, public transit benefit area, county transportation authority, or other municipal or quasi-municipal corporation authorized to impose sales and use taxes or business and occupation taxes.
The tax revenue that local government may consider in awarding purchase contracts is revenue from sales taxes and business and occupation taxes imposed upon suppliers by the local government. If a local government considers tax revenue from local suppliers, it must also consider any tax revenue it would receive from taxes imposed upon a supplier outside of its jurisdiction.
After considering tax revenue, local governments must award the purchase contract to the lowest bidder.
Summary of Bill:
In addition to being authorized to consider tax revenue, local governments are authorized to award contracts to bidders submitting the lowest bid before taxes are applied. Consideration of bids before taxes are applied is permitted only with regard to any sales taxes and business and occupation taxes imposed upon suppliers by units of local government.
Notice of a local government's intent to award contracts based on the lowest bid before taxes are applied must be given prior to submission of bids.
Appropriation: None.
Fiscal Note: Not requested.
Effective Date: The bill takes effect 90 days after adjournment of the session in which the bill is passed.