By: Ogden S.B. No. 514 A BILL TO BE ENTITLED AN ACT 1-1 relating to the payment and use of a bid guaranty for a state 1-2 highway improvement contract. 1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-4 SECTION 1. Subchapter A, Chapter 223, Transportation Code, 1-5 is amended by adding Sections 223.014 and 223.015 to read as 1-6 follows: 1-7 Sec. 223.014. BID GUARANTY. (a) The commission by rule 1-8 shall provide a method by which a bidder may submit a bid guaranty. 1-9 The rules may authorize the use of electronic funds transfer, 1-10 checks, including electronic checks, money orders, escrow accounts, 1-11 including the bidder's retainage escrow account, trust accounts, 1-12 including the bidder's retainage trust account, and credit cards 1-13 issued by a financial institution chartered by a state or the 1-14 United States or by a nationally recognized credit organization 1-15 approved by the department. The department may require the payment 1-16 of a discount or service charge for the use of a credit card. 1-17 (b) The department may establish one or more escrow accounts 1-18 in the state highway fund for the prepayment of bid guaranties. 1-19 The bid guaranties and any fees the department establishes to 1-20 administer this subsection shall be administered in accordance with 1-21 an agreement approved by the department. The department shall 1-22 deposit each administrative fee to the credit of the state highway 1-23 fund. Money credited to the state highway fund from fees collected 1-24 under this subsection may be appropriated only to the department to 2-1 administer this subsection. 2-2 Sec. 223.015. DEPOSIT AND INVESTMENT OF BID GUARANTY. 2-3 (a) The department may authorize the use of a trust account for 2-4 the purpose of providing a required bid guaranty. 2-5 (b) The guaranty shall be deposited in accordance with a 2-6 trust agreement with a state or nationally chartered financial 2-7 institution domiciled in this state and selected by the bidder. 2-8 (c) The department shall prescribe a trust agreement that 2-9 protects the interests of this state. 2-10 (d) Interest earned under the trust agreement shall be paid 2-11 to the bidder unless specified otherwise in the trust agreement. 2-12 (e) The applicable financial institution is responsible for 2-13 all amounts resulting from the deposit of the guaranty until 2-14 released from that responsibility in accordance with the trust 2-15 agreement. 2-16 (f) The bidder shall pay all expenses incident to the 2-17 deposit and all charges imposed by the financial institution for 2-18 custody of the guaranties and forwarding of interest on a bid 2-19 guaranty. The expenses may not be included in the bid and are not 2-20 otherwise the responsibility of the state. 2-21 (g) On the request of a bidder, the financial institution 2-22 may reinvest the guaranty amounts in a certificate of deposit or 2-23 another similar instrument prescribed by the trust agreement. The 2-24 certificate of deposit or other instrument must be issued by a 2-25 state or nationally chartered financial institution domiciled in 2-26 this state. 3-1 (h) On the request of a bidder, the financial institution 3-2 shall certify and verify to the department the amount on deposit. 3-3 The trust agreement must specify the method for providing the 3-4 required information. 3-5 SECTION 2. The importance of this legislation and the 3-6 crowded condition of the calendars in both houses create an 3-7 emergency and an imperative public necessity that the 3-8 constitutional rule requiring bills to be read on three several 3-9 days in each house be suspended, and this rule is hereby suspended, 3-10 and that this Act take effect and be in force from and after its 3-11 passage, and it is so enacted.