1-1 By: Ogden S.B. No. 514 1-2 (In the Senate - Filed February 15, 1999; February 17, 1999, 1-3 read first time and referred to Committee on State Affairs; 1-4 March 29, 1999, reported adversely, with favorable Committee 1-5 Substitute by the following vote: Yeas 8, Nays 0; March 29, 1999, 1-6 sent to printer.) 1-7 COMMITTEE SUBSTITUTE FOR S.B. No. 514 By: Nixon 1-8 A BILL TO BE ENTITLED 1-9 AN ACT 1-10 relating to the payment and use of a bid guaranty for a state 1-11 highway improvement contract. 1-12 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-13 SECTION 1. Subchapter A, Chapter 223, Transportation Code, 1-14 is amended by adding Sections 223.014 and 223.015 to read as 1-15 follows: 1-16 Sec. 223.014. BID GUARANTY. (a) The commission by rule 1-17 shall provide a method by which a bidder may submit a bid guaranty. 1-18 The rules may authorize the use of electronic funds transfer, 1-19 checks, including electronic checks, money orders, escrow accounts, 1-20 including the bidder's retainage escrow account, trust accounts, 1-21 including the bidder's retainage trust account, and credit cards 1-22 issued by a financial institution chartered by a state or the 1-23 United States or by a nationally recognized credit organization 1-24 approved by the department. The department may require the payment 1-25 of a discount or service charge for the use of a credit card. 1-26 (b) The department may establish one or more escrow accounts 1-27 in the state highway fund for the prepayment of bid guaranties. 1-28 The bid guaranties and any fees the department establishes to 1-29 administer this subsection shall be administered in accordance with 1-30 an agreement approved by the department. The department shall 1-31 deposit each administrative fee to the credit of the state highway 1-32 fund. Money credited to the state highway fund from fees collected 1-33 under this subsection may be appropriated only to the department to 1-34 administer this subsection. 1-35 Sec. 223.015. DEPOSIT AND INVESTMENT OF BID GUARANTY. 1-36 (a) The department may authorize the use of a trust account for 1-37 the purpose of providing a required bid guaranty. 1-38 (b) The guaranty shall be deposited in accordance with a 1-39 trust agreement with a state or nationally chartered financial 1-40 institution domiciled in this state and selected by the bidder. 1-41 (c) The department shall prescribe a trust agreement that 1-42 protects the interests of this state. 1-43 (d) Interest earned under the trust agreement shall be paid 1-44 to the bidder unless specified otherwise in the trust agreement. 1-45 (e) The applicable financial institution is responsible for 1-46 all amounts resulting from the deposit of the guaranty until 1-47 released from that responsibility in accordance with the trust 1-48 agreement. 1-49 (f) The bidder shall pay all expenses incident to the 1-50 deposit and all charges imposed by the financial institution for 1-51 custody of the guaranties and forwarding of interest on a bid 1-52 guaranty. The expenses may not be included in the bid and are not 1-53 otherwise the responsibility of the state. 1-54 (g) On the request of a bidder, the financial institution 1-55 may reinvest the guaranty amounts in a certificate of deposit or 1-56 another similar instrument prescribed by the trust agreement. The 1-57 certificate of deposit or other instrument must be issued by a 1-58 state or nationally chartered financial institution domiciled in 1-59 this state. 1-60 (h) On the request of a bidder, the financial institution 1-61 shall certify and verify to the department the amount on deposit. 1-62 The trust agreement must specify the method for providing the 1-63 required information. 1-64 SECTION 2. The importance of this legislation and the 2-1 crowded condition of the calendars in both houses create an 2-2 emergency and an imperative public necessity that the 2-3 constitutional rule requiring bills to be read on three several 2-4 days in each house be suspended, and this rule is hereby suspended, 2-5 and that this Act take effect and be in force from and after its 2-6 passage, and it is so enacted. 2-7 * * * * *