Introduction to Form 1295
In 2015, the Texas Legislature enacted House Bill 1295 in response to high-profile procurement scandals. Authored by Representative Giovanni Capriglione (R-Southlake) and Senator Kelly Hancock (R-North Richland Hills), HB1295 seeks to promote transparency and accountability in government contracts. The bill specifically mandates the disclosure of interested parties in contracts involving governmental entities and state agencies. It aims to prevent conflicts of interest and enhance public trust.
1295 Disclosure Requirements and the Role of Interested Parties
HB1295 mandates that businesses must submit a disclosure of interested parties when entering into contracts that meet certain criteria. These criteria include contracts that require a governing body’s action or vote, contracts valued at $1 million or more, or contracts for services necessitating state lobbyist registration. Additionally, this legislation defines “interested parties” as individuals or entities with a controlling interest in the business entity, or intermediaries who assist in the contracting process. Intermediaries are identified as those compensated to facilitate contract negotiations or communications with the governmental entity, without being direct employees of the business.
Filing Process and Accessibility
To streamline compliance, the Texas Ethics Commission developed Form 1295 for electronic submission. This form must include detailed contract information and the interested parties. It must also contain an authorized representative of the business entity’s signature. After submission, the governmental entity or state agency must acknowledge receipt within 30 days.
Challenges and Legislative Adjustments
By 2022, challenges in the implementation of HB1295 surfaced, notably with the City of Hutto and Legacy Hutto LLC. The City successfully argued in court that the missing Texas Form 1295 voided their contract for a mixed-use development project. Not surprisingly, this incident highlighted potential misuse of the form’s requirements to avoid contractual obligations. As a result, the Texas Legislature in 2023 passed HB1817. This bill requires governmental entities to provide written notice to contractors missing the interested person form. The new cure period allows a contractor to submit the required disclosure and prevent voiding the contract, addressing the issue of contractors facing an unfair penalty without notice.
For more comprehensive details on HB1295, its requirements, and the filing process, interested parties can refer to the Texas Ethics Commission’s FAQs on Form 1295. This legislation continues to evolve, reflecting the Legislature’s commitment to refining and enhancing governance through transparency.
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