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.