1-1  By:  Brown                                             S.B. No. 532
    1-2        (In the Senate - Filed February 13, 1995; February 14, 1995,
    1-3  read first time and referred to Committee on State Affairs;
    1-4  March 20, 1995, reported adversely, with favorable Committee
    1-5  Substitute by the following vote:  Yeas 12, Nays 0; March 20, 1995,
    1-6  sent to printer.)
    1-7  COMMITTEE SUBSTITUTE FOR S.B. No. 532                   By:  Nelson
    1-8                         A BILL TO BE ENTITLED
    1-9                                AN ACT
   1-10  relating to the retainage of payments for a contract to improve a
   1-11  state highway.
   1-12        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
   1-13        SECTION 1.  Section 13, Chapter 186, General Laws, Acts of
   1-14  the 39th Legislature, Regular Session, 1925 (Article 6674m,
   1-15  Vernon's Texas Civil Statutes), is amended to read as follows:
   1-16        Sec. 13.  (a)  Said contracts may provide for partial
   1-17  payments to an amount not exceeding ninety-five per cent (95%) of
   1-18  the value of the work done.  Five per cent (5%) of the contract
   1-19  price shall be retained until the entire work has been completed
   1-20  and accepted.  Provided, that at the request of the contractor and
   1-21  with the approval of the Texas <State Highway> Department of
   1-22  Transportation and the State Treasurer the five per cent (5%)
   1-23  retained amount may be deposited under the terms of a trust
   1-24  agreement with a state or national bank domiciled in Texas as
   1-25  selected by the contractor.  Said bank, acting as escrow agent and
   1-26  by instructions from the contractor, may reinvest the retained
   1-27  amount in certificates of deposit issued by state or national banks
   1-28  domiciled in Texas, bank time deposits, or other similar
   1-29  investments prescribed by the trust agreement.  Interest earned on
   1-30  said funds shall be paid to the contractor unless otherwise
   1-31  specified under the terms of said trust agreement.  The escrow
   1-32  agent shall be responsible for all investments and funds as a
   1-33  result of the deposits of the retained amounts until released from
   1-34  such responsibility as instructed by the provisions of said trust
   1-35  agreement.  The Texas <State Highway> Department of Transportation
   1-36  shall provide a trust agreement that will protect the interests of
   1-37  the State of Texas.  All expenses incident to the deposit and all
   1-38  charges made by the escrow agent for custody of the securities and
   1-39  forwarding of interest thereon shall be paid solely by the
   1-40  contractor.  No such expense or charge shall apply to either the
   1-41  contract or the State of Texas.
   1-42        (b)  The limitation on partial payments and the requirement
   1-43  that five per cent (5%) of the contract price be retained until the
   1-44  work has been completed and accepted shall not apply to contracts
   1-45  for maintenance or contracts for the making of all necessary plans
   1-46  and surveys preliminary to construction, reconstruction, or
   1-47  maintenance.
   1-48        SECTION 2.  The change in law made by Section 1 of this Act
   1-49  applies only to a contract awarded on or after the effective date
   1-50  of this Act.  A contract awarded before the effective date of this
   1-51  Act is governed by the law then in effect, and the former law is
   1-52  continued in effect for that purpose.
   1-53        SECTION 3.  The importance of this legislation and the
   1-54  crowded condition of the calendars in both houses create an
   1-55  emergency and an imperative public necessity that the
   1-56  constitutional rule requiring bills to be read on three several
   1-57  days in each house be suspended, and this rule is hereby suspended,
   1-58  and that this Act take effect and be in force from and after its
   1-59  passage, and it is so enacted.
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