By Hamric                                             H.B. No. 2979
         Line and page numbers may not match official copy.
         Bill not drafted by TLC or Senate E&E.
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to retainage on highway contracts.
 1-3           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-4           SECTION 1.  Amend Section 223.010, Transportation Code, as
 1-5     follows:
 1-6           Sec. 223.010.  Deposit and Investment of Retained Amount.
 1-7     (a)  Five percent of the contract price shall be retained until the
 1-8     entire improvement has been completed and accepted except as
 1-9     provided in subsection (h).
1-10           (b)  At the request of the contractor and with the approval
1-11     of the department and the comptroller, the amount retained my be
1-12     deposited under a trust agreement with a state or national bank
1-13     domiciled in this state and selected by the contractor.
1-14           (c)  The department shall provide a trust agreement that
1-15     protects the interests of the state.
1-16           (d)  The bank, acting as escrow agent and by instructions
1-17     from the contractor, may reinvest the retained amount in a
1-18     certificate of deposit issued by a state or national bank domiciled
1-19     in this state, bank time deposit, or other similar investment
1-20     prescribed by the trust agreement.
1-21           (e)  Interest earned under the trust agreement shall be paid
 2-1     to the contractor unless specified otherwise under the trust
 2-2     agreement.
 2-3           (f)  The escrow agent is responsible for all investments and
 2-4     amounts resulting from the deposits of the retained amount until
 2-5     released from that responsibility under the trust agreement.
 2-6           (g)  The contractor shall pay all expenses incident to the
 2-7     deposit and all charges made by the escrow agent for custody of the
 2-8     securities and forwarding of interest on those securities.  Those
 2-9     expenses or charges may not apply to the contract or to the state.
2-10           (h)  Four percent of the contract price shall be retained
2-11     until the entire improvement has been completed and accepted on any
2-12     contract that includes the use of recycled materials.
2-13           SECTION 2.  This Act takes effect September 1, 1999.
2-14           SECTION 3.  EMERGENCY CLAUSE.  The importance of this
2-15     legislation and the crowded condition of the calendars in both
2-16     houses create an emergency and an imperative public necessity that
2-17     the constitutional rule requiring bills to be read on three several
2-18     days in each house be suspended, and this rule is hereby suspended,
2-19     and that this Act take effect and be in force from and after its
2-20     passage, and it is so enacted.