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


Senate Research CenterS.B. 1823
By: Truan
State Affairs
4/23/1999
Committee Report (Amended)


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

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

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.  Provides that if the Texas
Department of Transportation, by rule, requires a proposal guaranty as a
condition of bidding for a contract, the rule must allow a bidder to submit
a bid guaranty in certain forms.   

SECTION 2.Effective date:  January 1, 2000.

SECTION 3.Emergency clause.

SUMMARY OF COMMITTEE CHANGES

SECTION 1.
 
Amends Section 223.014, Transportation Code, by deleting proposed text
authorizing a department's guaranty to be in certain format, and adding
text that requires the department to require certain rules to allow a
bidder to submit a bid guaranty in certain formats.