Relating to consideration of the location of a bidder's principal place of business in certain municipal contracts.

HB 1198 modifies Texas municipal contracting rules to allow local governments to choose a bidder with a principal business in the municipality under specific conditions. If a local bidder’s price is within 5% of the lowest bid for contracts under $100,000 (construction) or $500,000 (other purchases), the municipality may select them instead of the lowest bidder. This requires the municipality’s governing body to make a written determination that the local bidder provides the best combination of price and economic benefits, including local hiring and increased tax revenue. The law applies only to contracts where bidding notices are issued on or after September 1, 2025.