By Bosse H.B. No. 2147
74R3671 DRH-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to exempting contracts for certain services from retainage
1-3 requirements applying to highway improvement contracts.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 13, Chapter 186, General Laws, Acts of
1-6 the 39th Legislature, Regular Session, 1925 (Article 6674m,
1-7 Vernon's Texas Civil Statutes), is amended to read as follows:
1-8 Sec. 13. (a) Except as provided by Subsection (b) of this
1-9 section, said <Said> contracts may provide for partial payments to
1-10 an amount not exceeding ninety-five per cent (95%) of the value of
1-11 the work done. Five per cent (5%) of the contract price shall be
1-12 retained until the entire work has been completed and accepted.
1-13 Provided, that at the request of the contractor and with the
1-14 approval of the Texas <State Highway> Department of Transportation
1-15 and the State Treasurer the five per cent (5%) retained amount may
1-16 be deposited under the terms of a trust agreement with a state or
1-17 national bank domiciled in Texas as selected by the contractor.
1-18 Said bank, acting as escrow agent and by instructions from the
1-19 contractor, may reinvest the retained amount in certificates of
1-20 deposit issued by state or national banks domiciled in Texas, bank
1-21 time deposits, or other similar investments prescribed by the trust
1-22 agreement. Interest earned on said funds shall be paid to the
1-23 contractor unless otherwise specified under the terms of said trust
1-24 agreement. The escrow agent shall be responsible for all
2-1 investments and funds as a result of the deposits of the retained
2-2 amounts until released from such responsibility as instructed by
2-3 the provisions of said trust agreement. The department <State
2-4 Highway Department> shall provide a trust agreement that will
2-5 protect the interests of the State of Texas. All expenses incident
2-6 to the deposit and all charges made by the escrow agent for custody
2-7 of the securities and forwarding of interest thereon shall be paid
2-8 solely by the contractor. No such expense or charge shall apply to
2-9 either the contract or the State of Texas.
2-10 (b) The Texas Department of Transportation may not retain
2-11 any money under Subsection (a) of this section if the contract is
2-12 for engineering, designing, planning, or surveying services only.
2-13 SECTION 2. The change in law made by this Act applies only
2-14 to a contract awarded on or after the effective date of this Act.
2-15 A contract awarded before the effective date of this Act is
2-16 governed by the law in effect when the contract was awarded, and
2-17 the former law is continued in effect for that purpose.
2-18 SECTION 3. This Act takes effect September 1, 1995.
2-19 SECTION 4. The importance of this legislation and the
2-20 crowded condition of the calendars in both houses create an
2-21 emergency and an imperative public necessity that the
2-22 constitutional rule requiring bills to be read on three several
2-23 days in each house be suspended, and this rule is hereby suspended.