By Alexander                                          H.B. No. 2582
                                 A BILL TO BE ENTITLED
    1-1                                AN ACT
    1-2  relating to the retainage of payments for a contract to improve a
    1-3  state highway.
    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) Said contracts may provide for partial payments
    1-9  to an amount not exceeding ninety-five per cent (95%) of the value
   1-10  of the work done.  Five per cent (5%) of the contract price shall
   1-11  be retained until the entire work has been complete and accepted.
   1-12  Provided that at the request of the contractor and with the
   1-13  approval of the Texas <State Highway> Department of Transportation
   1-14  and the State Treasurer the five per cent (5%) retained amount may
   1-15  be deposited under the terms of a trust agreement with a state or
   1-16  national bank domiciled in Texas as selected by the contractor.
   1-17  Said bank, acting as escrow agent and by instructions from the
   1-18  contractor, may reinvest the retained amount in certificates of
   1-19  deposits issued by state or national banks domiciled in Texas, bank
   1-20  time deposits, or other similar investments prescribed by the trust
   1-21  agreement.  Interest earned on said funds shall be paid to the
   1-22  contractor unless otherwise specified under the terms of said trust
   1-23  agreement.   The Texas <State Highway> Department of Transportation
    2-1  shall provide a trust agreement that will protect the interests of
    2-2  the State of Texas.  All expenses incident to the deposit and all
    2-3  charges made by the escrow agent for custody of the securities and
    2-4  forwarding of interest thereon shall be paid solely by the
    2-5  contractor.  No such expense or charge shall apply to either the
    2-6  contract or the State of Texas.
    2-7        (b)  The limitation on partial payments and the requirement
    2-8  that five per cent of the contract price be retained until the work
    2-9  has been completed and accepted shall not apply to contracts for
   2-10  maintenance or contracts for the making of all necessary plans and
   2-11  surveys preliminary to construction, reconstruction, or
   2-12  maintenance.
   2-13        SECTION 2.  The change in law made by Section 1 of this Act
   2-14  applies only to a contract awarded on or after the effective date
   2-15  of this Act.  A contract awarded before the effective date of this
   2-16  Act is governed by the law then in effect, and the former law is
   2-17  continued in effect for that purpose.
   2-18        SECTION 3.  The importance of this legislation and the
   2-19  crowded condition of the calendars in both houses create an
   2-20  emergency and an imperative public necessity that the
   2-21  constitutional rule requiring bills to be read on three several
   2-22  days in each house be suspended, and this rule is hereby suspended,
   2-23  and that this Act take effect and be in force from and after its
   2-24  passage, and it is so enacted.