1-1 By: Ogden S.B. No. 487 1-2 (In the Senate - Filed January 31, 2001; February 1, 2001, 1-3 read first time and referred to Committee on State Affairs; 1-4 March 14, 2001, reported adversely, with favorable Committee 1-5 Substitute by the following vote: Yeas 8, Nays 0; March 14, 2001, 1-6 sent to printer.) 1-7 COMMITTEE SUBSTITUTE FOR S.B. No. 487 By: Armbrister 1-8 A BILL TO BE ENTITLED 1-9 AN ACT 1-10 relating to bids for and awards of a state highway improvement 1-11 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 A rule may authorize the use of an electronic funds transfer, a 1-19 check, including an electronic check, a money order, an escrow 1-20 account, a trust account, a credit card issued by a financial 1-21 institution chartered by a state or the United States or by a 1-22 nationally recognized credit organization approved by the 1-23 department, or another method the commission determines to be 1-24 suitable. The department may require the payment of a discount or 1-25 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. Notwithstanding any other 1-31 law and as specified in the agreement, any available accumulated 1-32 interest and other income earned on money in an escrow account 1-33 shall be paid to the bidder or credited to the escrow account. 1-34 (c) The department shall deposit each administrative fee and 1-35 discount and service charge collected under this section to the 1-36 credit of the state highway fund. 1-37 (d) The commission's rules may not prohibit a bidder from 1-38 submitting a bid guaranty by use of a cashier's check, money order, 1-39 or teller's check. 1-40 Sec. 223.015. DEPOSIT AND INVESTMENT OF BID GUARANTY. 1-41 (a) The department may authorize the use of a trust account for 1-42 the purpose of providing a required bid guaranty. 1-43 (b) The guaranty shall be deposited in accordance with a 1-44 trust agreement with a state or nationally chartered financial 1-45 institution that has its main office or a branch office in this 1-46 state and that is selected by the bidder. 1-47 (c) The department shall prescribe a trust agreement that 1-48 protects the interests of this state. 1-49 (d) Interest earned under the trust agreement shall be paid 1-50 to the bidder unless specified otherwise in the trust agreement. 1-51 (e) The applicable financial institution is responsible for 1-52 all amounts resulting from the deposit of the guaranty until 1-53 released from that responsibility in accordance with the trust 1-54 agreement. 1-55 (f) The bidder shall pay all expenses incident to the 1-56 deposit and all charges imposed by the financial institution for 1-57 custody of the guaranties and forwarding of interest on a bid 1-58 guaranty. The expenses may not be included in the bid and are not 1-59 otherwise the responsibility of the state. 1-60 (g) On the request of a bidder, the financial institution 1-61 may reinvest the guaranty amounts in a certificate of deposit or 1-62 another similar instrument prescribed by the trust agreement. The 1-63 certificate of deposit or other instrument must be issued by a 1-64 state or nationally chartered financial institution that has its 2-1 main office or a branch office in this state. 2-2 (h) On request, the financial institution shall certify and 2-3 verify to the department the amount on deposit. The trust 2-4 agreement must specify the method for providing the required 2-5 information. 2-6 SECTION 2. Section 223.0041, Transportation Code, is amended 2-7 by adding Subsection (d) to read as follows: 2-8 (d) Unless by a unanimous vote of the members present, the 2-9 commission may not award a contract to a bidder that has a total 2-10 amount under contract that equals more than 40 percent of the total 2-11 amount of highway construction under contract in the highway 2-12 district in which the highway project under bid is located. 2-13 SECTION 3. This Act takes effect immediately if it receives 2-14 a vote of two-thirds of all the members elected to each house, as 2-15 provided by Section 39, Article III, Texas Constitution. If this 2-16 Act does not receive the vote necessary for immediate effect, this 2-17 Act takes effect September 1, 2001. 2-18 * * * * *