SRC-AXB S.B. 514 76(R)   BILL ANALYSIS


Senate Research Center   S.B. 514
By: Ogden
Infrastructure
3/5/1999
As Filed


DIGEST 

Currently, the Texas Department of Transportation (TXDOT) may establish an
electronic bidding system which eliminates the need for contractors to
manually deliver their bids. Electronic bidding is expected to reduce
errors in the bids, thereby reducing the number of disqualified bids, and
increasing the choices TXDOT is able to consider.   

The required submission of an actual bid guaranty check before the bid
deadline is a hindrance to the successful initiation of an electronic
bidding system.  TXDOT needs statutory authorization to allow the
submission of the accompanying bid guaranty in an electronic format.  This
bill would create rules and provisions for the deposit and investment of
bid guaranties. 

PURPOSE

As proposed, S.B. 514 sets forth requirements for the Texas Transportation
Commission and the Texas Department of Transportation regarding the deposit
and investment of bid guaranties. 

RULEMAKING AUTHORITY

Rulemaking authority is granted to the Texas Transportation Commission in
SECTION 1 (Section 223.014(a), Transportation Code) of this bill. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Chapter 223A, Transportation Code, by adding Sections
223.014 and 223.015, as follows: 

Sec.  223.014.  BID GUARANTY.  Requires the Texas Transportation Commission
(TTC) to adopt rules on the method by which a bidder submits a bid
guaranty.  Authorizes the rules to authorize the utilization of various
financial transfer options.  Authorizes the Texas Department of
Transportation (TXDOT) to require certain payments for the use of a credit
card.  Authorizes TXDOT to establish multiple escrow accounts in the state
highway fund for prepayment of bid guaranties.  Requires TXDOT
administrative fees related to this subsection to be administered in
compliance with TXDOT terms and conditions.  Requires TXDOT to deposit
administrative fees to the credit of the state highway fund, and limits the
purposes for which the fees may be appropriated. 
 
Sec.  223.015.  DEPOSIT AND INVESTMENT OF BID GUARANTY.  Authorizes TXDOT
to authorize the use of a trust account to provide a required bid guaranty.
Sets forth provisions for the guaranty's trust agreement to be prescribed
by TXDOT.  Requires interest from the trust agreement to be paid to the
bidder.  Provides that the financial institution is responsible for
guaranty amounts until released by the trust agreement.  Sets forth
payments that are the responsibility of the bidder.  Prohibits the expenses
from being included in the bid or from being the state's responsibility.
Sets forth requirements and provisions under which the financial
institution makes certain investments.  Provides that the trust agreement
will specify the method for the financial institution to provide required
information. 
 

SECTION 2.Emergency clause.
   Effective date:  upon passage.