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A BILL TO BE ENTITLED
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AN ACT
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relating to the bid bond form of bid deposit for certain special |
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district construction projects. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 49.271(c), Water Code, is amended to |
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read as follows: |
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(c) The district may adopt minimum criteria for the |
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qualifications of bidders on its construction contracts and for |
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sureties issuing payment and performance bonds. For construction |
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contracts over $25,000, the district shall require a person who |
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bids to submit a certified or cashier's check on a responsible bank |
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in the state equal to at least two percent of the total amount of the |
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bid, or a bid bond of at least two percent of the total amount of the |
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bid issued by a surety legally authorized to do business in this |
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state, as a good faith deposit to ensure execution of the contract. |
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Notwithstanding any criteria adopted under this subsection, for a |
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contract for more than $250,000, the district must accept a bid bond |
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in the amount required by the district as a bid deposit if the bid |
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bond meets the other requirements of this subsection. If the |
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successful bidder fails or refuses to enter into a proper contract |
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with the district, or fails or refuses to furnish the payment and |
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performance bonds required by law, the bidder forfeits the deposit. |
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The payment, performance, and bid bonding requirements of this |
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subsection do not apply to a contract for the purchase of equipment, |
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materials, or machinery not otherwise incorporated into a |
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construction project. |
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SECTION 2. The change in law made by this Act applies only |
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to a construction contract deposit made on or after the effective |
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date of this Act. A deposit made before the effective date of this |
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Act is subject to the law in effect on the date of the deposit, and |
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that law is continued in effect for that purpose. |
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SECTION 3. This Act takes effect immediately if it receives |
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a vote of two-thirds of all the members elected to each house, as |
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provided by Section 39, Article III, Texas Constitution. If this |
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Act does not receive the vote necessary for immediate effect, this |
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Act takes effect September 1, 2007. |