79R2520 MTB-D

By:  Lindsay                                                      S.B. No. 1474



A BILL TO BE ENTITLED

AN ACT

relating to bond requirements for privatized maintenance 
contracts.         
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Section 223.042, Transportation Code, is amended 
by amending Subsections (i) and (j), as amended by Chapter 28, Acts 
of the 78th Legislature, Regular Session, 2003, and by adding 
Subsections (k) and (l) to read as follows:
	(j) [(i)] As an alternative to the requirements of Section 
2253.021, Government Code, the department may require that a 
performance or payment bond securing a contractor's performance 
under a contract awarded under this section for a routine 
maintenance activity:
		(1)  be in an 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
		(2)  be in an amount equal to the greatest annual amount 
to be paid the contractor during the term of the bond and be for a 
term of two years, renewable annually in two-year increments.
	(k) [(j)]  A bond posted under Subsection (j) [(i)] must:
		(1)  be solely for the protection of the department; 
and                    
		(2)  be conditioned on the faithful performance of the 
maintenance work in accordance with the contract requirements.
	(l)  A bond that replaces a bond issued in accordance with 
Subsections (j) and (k) relieves the surety and the contractor on 
the previous bond from all obligations associated with the previous 
bond.
	SECTION 2.  A maintenance contract entered into by the Texas 
Department of Transportation before the effective date of this Act 
under Section 223.042, Transportation Code, is governed during the 
remaining term of the contract by Section 223.042, Transportation 
Code, as it existed immediately before the effective date of this 
Act, and the prior law is continued in effect for that purpose. 
Section 223.042, Transportation Code, as amended by this Act, 
applies to the renewal of a contract described by this subsection.
	SECTION 3.  This Act takes effect immediately if it receives 
a vote of two-thirds of all the members elected to each house, as 
provided by Section 39, Article III, Texas Constitution.  If this 
Act does not receive the vote necessary for immediate effect, this 
Act takes effect September 1, 2005.