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.
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