By: Ogden S.B. No. 514 Line and page numbers may not match official copy. Bill not drafted by TLC or Senate E&E. 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 shall adopt 1-8 rules on the 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 trust accounts, and credit cards issued by a financial institution 1-12 chartered by a state or the United States or by a nationally 1-13 recognized credit organization approved by the department. The 1-14 department may require the payment of a discount or service charge 1-15 for the use of a credit card. 1-16 (b) The department may establish one or more escrow accounts 1-17 in the state highway fund for the prepayment of bid guaranties. 1-18 The bid guaranties and any administrative fees established by the 1-19 department for the administration of this subsection shall be 1-20 administered in accordance with an agreement containing terms and 1-21 conditions agreeable to the department. The department shall 1-22 deposit each administrative fee to the credit of the state highway 2-1 fund. The fees may be appropriated only to the department for 2-2 purposes of the administration of this subsection. 2-3 Sec. 223.015. DEPOSIT AND INVESTMENT OF BID 2-4 GUARANTY. (a) The department may authorize the use of a trust 2-5 account for the purpose of providing a required bid guaranty. 2-6 (b) The guaranty will be deposited pursuant to a trust 2-7 agreement with a state or nationally chartered institution 2-8 domiciled in this state and selected by the bidder. 2-9 (c) The department will prescribe a trust agreement that 2-10 protects the interests of the state. 2-11 (d) Interest earned under the trust agreement shall be paid 2-12 to the bidder unless specified otherwise in the trust agreement. 2-13 (e) The financial institution is responsible for all amounts 2-14 resulting from the deposit of the guaranty amounts until released 2-15 from that responsibility under the trust agreement. 2-16 (f) The bidder will pay for expenses incident to the deposit 2-17 and all charges made by the financial institution for custody of 2-18 the guaranties and forwarding of interest on those guaranties. 2-19 Those expenses may not be included in any way in the bid or 2-20 otherwise be the responsibility of the state. 2-21 (g) The financial institution upon instruction by the bidder 2-22 may reinvest the guaranty amounts in a certificate of deposit or 2-23 other similar investment prescribed by the trust agreement. These 2-24 instruments must be issued by a state or nationally chartered 2-25 financial institution domiciled in this state. 2-26 (h) The financial institution must upon request by the 3-1 bidder provide certification and verification of the amount on 3-2 deposit to the department. The trust agreement will specify the 3-3 method for providing the required information. 3-4 SECTION 2. The importance of this legislation and the 3-5 crowded condition of the calendars in both houses create an 3-6 emergency and an imperative public necessity that the 3-7 constitutional rule requiring bills to be read on three several 3-8 days in each house be suspended, and this rule is hereby suspended, 3-9 and that this Act take effect and be in force from and after its 3-10 passage, and it is so enacted.