SRC-JBJ S.B. 1823 76(R)   BILL ANALYSIS


Senate Research Center   S.B. 1823
76R4657 DRH-DBy: Truan
State Affairs
4/19/1999
As Filed


DIGEST 

Currently, a  financial surety is required by agencies that issues bids for
contracts.  The surety protects the agency from a default of a company to
which an agency has awarded a contract.  All agencies, except the Texas
Department of Transportation (TxDOT), accept either a bond, such as
insurance, or a cashier's check that is equal to 5 percent of the bid cost
to defray the cost if a bidder defaults.  TxDOT accepts only a cashier's
check.  As a result, small contractors have difficulty calling up adequate
cash resources to reserve in order to supply the cashier's check.  S.B.
1823 would amend the form of a proposal guaranty for a contract of TxDOT. 

PURPOSE

As proposed, S.B. 1823 amends the form of a proposal guaranty for a
contract of the Texas Department of Transportation. 

RULEMAKING AUTHORITY

This bill does not grant any additional rulemaking authority to a state
officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

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

Sec. 223.014.  FORM OF PROPOSAL GUARANTY.  Authorizes a guaranty to be in
certain monetary forms if the Texas Department of Transportation requires,
by rule, a proposal guaranty as a condition of bidding for a contract. 

SECTION 2.Effective date:  January 1, 1999.

SECTION 3.Emergency clause.