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                                  * * * * *