1-1 AN ACT 1-2 relating to bids for a state 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 by rule 1-8 shall provide a method by which a bidder may submit a bid guaranty. 1-9 A rule may authorize the use of an electronic funds transfer, a 1-10 check, including an electronic check, a money order, an escrow 1-11 account, a trust account, a credit card issued by a financial 1-12 institution chartered by a state or the United States or by a 1-13 nationally recognized credit organization approved by the 1-14 department, or another method the commission determines to be 1-15 suitable. The department may require the payment of a discount or 1-16 service charge for the use of a credit card. 1-17 (b) The department may establish one or more escrow accounts 1-18 in the state highway fund for the prepayment of bid guaranties. 1-19 The bid guaranties and any fees the department establishes to 1-20 administer this subsection shall be administered in accordance with 1-21 an agreement approved by the department. Notwithstanding any other 1-22 law and as specified in the agreement, any available accumulated 1-23 interest and other income earned on money in an escrow account 1-24 shall be paid to the bidder or credited to the escrow account. 1-25 (c) The department shall deposit each administrative fee and 2-1 discount and service charge collected under this section to the 2-2 credit of the state highway fund. 2-3 (d) The commission's rules may not prohibit a bidder from 2-4 submitting a bid guaranty by use of a cashier's check, money order, 2-5 or teller's check. 2-6 Sec. 223.015. DEPOSIT AND INVESTMENT OF BID GUARANTY. 2-7 (a) The department may authorize the use of a trust account for 2-8 the purpose of providing a required bid guaranty. 2-9 (b) The guaranty shall be deposited in accordance with a 2-10 trust agreement with a state or nationally chartered financial 2-11 institution that has its main office or a branch office in this 2-12 state and that is selected by the bidder. 2-13 (c) The department shall prescribe a trust agreement that 2-14 protects the interests of this state. 2-15 (d) Interest earned under the trust agreement shall be paid 2-16 to the bidder unless specified otherwise in the trust agreement. 2-17 (e) The applicable financial institution is responsible for 2-18 all amounts resulting from the deposit of the guaranty until 2-19 released from that responsibility in accordance with the trust 2-20 agreement. 2-21 (f) The bidder shall pay all expenses incident to the 2-22 deposit and all charges imposed by the financial institution for 2-23 custody of the guaranties and forwarding of interest on a bid 2-24 guaranty. The expenses may not be included in the bid and are not 2-25 otherwise the responsibility of the state. 2-26 (g) On the request of a bidder, the financial institution 3-1 may reinvest the guaranty amounts in a certificate of deposit or 3-2 another similar instrument prescribed by the trust agreement. The 3-3 certificate of deposit or other instrument must be issued by a 3-4 state or nationally chartered financial institution that has its 3-5 main office or a branch office in this state. 3-6 (h) On request, the financial institution shall certify and 3-7 verify to the department the amount on deposit. The trust 3-8 agreement must specify the method for providing the required 3-9 information. 3-10 SECTION 2. This Act takes effect immediately if it receives 3-11 a vote of two-thirds of all the members elected to each house, as 3-12 provided by Section 39, Article III, Texas Constitution. If this 3-13 Act does not receive the vote necessary for immediate effect, this 3-14 Act takes effect September 1, 2001. _______________________________ _______________________________ President of the Senate Speaker of the House I hereby certify that S.B. No. 487 passed the Senate on March 20, 2001, by the following vote: Yeas 29, Nays 1, one present, not voting; and that the Senate concurred in House amendment on April 25, 2001, by the following vote: Yeas 30, Nays 0, one present, not voting. _______________________________ Secretary of the Senate I hereby certify that S.B. No. 487 passed the House, with amendment, on April 20, 2001, by the following vote: Yeas 142, Nays 0, two present, not voting. _______________________________ Chief Clerk of the House Approved: _______________________________ Date _______________________________ Governor