SRC-TJG, AMY S.B. 1580 78(R)BILL ANALYSIS


Senate Research CenterS.B. 1580
By: Wentworth
Infrastructure Development and Security
8/25/2003
Enrolled

DIGEST AND PURPOSE 

Currently, state law requires private maintenance contractors for the
Texas Department of Transportation to post a performance bond for the life
of their contracts.  Most of these contracts are five to 10 years in
length, making it difficult for contractors to obtain bonds for the life
of the project.  S.B. 1580 allows contractors to obtain a bond securing a
contractor's performance under a routine maintenance activity contract
that meet certain financial criteria, to be in effect for one year from
the day work is resumed after any default by the contractor, or renewable
annually in two-year increments.  This bill also establishes the
requirements of the bond and the consequences of not posting the required
bond. 

RULEMAKING AUTHORITY

This bill does not expressly grant any additional rulemaking authority to
a state officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Section 223.042, Transportation Code, by adding
Subsections (i) and (j), as follows: 

(i) Authorizes the Texas Department of Transportation, as an alternative
to Section 2253.021 (Performance and Payment Bonds Required), Government
Code,  to require a bond securing a contractor's performance, under a
routine maintenance activity contract awarded under this section, to be
for the amount equal to the greatest annual amount to be paid the
contractor under the contract and remain in effect for one year from the
day work is resumed after any default by the contractor, or be in the
amount equal to the amount to be paid the contractor during the term of a
two-year bond, renewable annually in two-year increments. 

(j) Requires a bond posted under Subsection (i) to meet certain
requirements. 

SECTION 2.  (a) Effective date: upon passage or September 1, 2003.

(b) Makes application of this Act prospective.  Provides that Section
223.042 (Privatization of Maintenance Contracts), Transportation Code, as
amended by this Act, applies to the renewal of a contract described by
this subsection.