By: Ogden S.B. No. 487 A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to bids for and awards of a state highway improvement 1-3 contract. 1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-5 SECTION 1. Subchapter A, Chapter 223, Transportation Code, 1-6 is amended by adding Sections 223.014 and 223.015 to read as 1-7 follows: 1-8 Sec. 223.014. BID GUARANTY. (a) The commission by rule 1-9 shall provide a method by which a bidder may submit a bid guaranty. 1-10 A rule may authorize the use of an electronic funds transfer, a 1-11 check, including an electronic check, a money order, an escrow 1-12 account, a trust account, a credit card issued by a financial 1-13 institution chartered by a state or the United States or by a 1-14 nationally recognized credit organization approved by the 1-15 department, or another method the commission determines to be 1-16 suitable. The department may require the payment of a discount or 1-17 service charge for the use of a credit card. 1-18 (b) The department may establish one or more escrow accounts 1-19 in the state highway fund for the prepayment of bid guaranties. 1-20 The bid guaranties and any fees the department establishes to 1-21 administer this subsection shall be administered in accordance with 1-22 an agreement approved by the department. Notwithstanding any other 1-23 law and as specified in the agreement, any available accumulated 1-24 interest and other income earned on money in an escrow account 1-25 shall be paid to the bidder or credited to the escrow account. 2-1 (c) The department shall deposit each administrative fee and 2-2 discount and service charge collected under this section to the 2-3 credit of the state highway fund. 2-4 (d) The commission's rules may not prohibit a bidder from 2-5 submitting a bid guaranty by use of a cashier's check, money order, 2-6 or teller's check. 2-7 Sec. 223.015. DEPOSIT AND INVESTMENT OF BID GUARANTY. 2-8 (a) The department may authorize the use of a trust account for 2-9 the purpose of providing a required bid guaranty. 2-10 (b) The guaranty shall be deposited in accordance with a 2-11 trust agreement with a state or nationally chartered financial 2-12 institution that has its main office or a branch office in this 2-13 state and that is selected by the bidder. 2-14 (c) The department shall prescribe a trust agreement that 2-15 protects the interests of this state. 2-16 (d) Interest earned under the trust agreement shall be paid 2-17 to the bidder unless specified otherwise in the trust agreement. 2-18 (e) The applicable financial institution is responsible for 2-19 all amounts resulting from the deposit of the guaranty until 2-20 released from that responsibility in accordance with the trust 2-21 agreement. 2-22 (f) The bidder shall pay all expenses incident to the 2-23 deposit and all charges imposed by the financial institution for 2-24 custody of the guaranties and forwarding of interest on a bid 2-25 guaranty. The expenses may not be included in the bid and are not 2-26 otherwise the responsibility of the state. 3-1 (g) On the request of a bidder, the financial institution 3-2 may reinvest the guaranty amounts in a certificate of deposit or 3-3 another similar instrument prescribed by the trust agreement. The 3-4 certificate of deposit or other instrument must be issued by a 3-5 state or nationally chartered financial institution that has its 3-6 main office or a branch office in this state. 3-7 (h) On request, the financial institution shall certify and 3-8 verify to the department the amount on deposit. The trust 3-9 agreement must specify the method for providing the required 3-10 information. 3-11 SECTION 2. Section 223.0041, Transportation Code, is amended 3-12 by adding Subsection (d) to read as follows: 3-13 (d) Unless by a two-thirds vote of the membership, the 3-14 commission may not award a contract to a bidder that has a total 3-15 amount under contract that equals more than 40 percent of the total 3-16 amount of highway construction under contract in the highway 3-17 district in which the highway project under bid is located. 3-18 SECTION 3. This Act takes effect immediately if it receives 3-19 a vote of two-thirds of all the members elected to each house, as 3-20 provided by Section 39, Article III, Texas Constitution. If this 3-21 Act does not receive the vote necessary for immediate effect, this 3-22 Act takes effect September 1, 2001.