By: Smith of Harris H.B. No. 576
relating to the bid bond form of bid deposit for certain special
district construction projects.
       SECTION 1.  Section 49.271(c), Water Code, is amended to
read as follows:
       (c)  The district may adopt minimum criteria for the
qualifications of bidders on its construction contracts and for
sureties issuing payment and performance bonds. For construction
contracts over $25,000, the district shall require a person who
bids to submit a certified or cashier's check on a responsible bank
in the state equal to at least two percent of the total amount of the
bid, or a bid bond of at least two percent of the total amount of the
bid issued by a surety legally authorized to do business in this
state, as a good faith deposit to ensure execution of the contract.
Notwithstanding any criteria adopted under this subsection, for a
contract for more than $250,000, the district must accept a bid bond
in the amount required by the district as a bid deposit if the bid
bond meets the other requirements of this subsection. If the
successful bidder fails or refuses to enter into a proper contract
with the district, or fails or refuses to furnish the payment and
performance bonds required by law, the bidder forfeits the deposit.
The payment, performance, and bid bonding requirements of this
subsection do not apply to a contract for the purchase of equipment,
materials, or machinery not otherwise incorporated into a
construction project.
       SECTION 2.  The change in law made by this Act applies only
to a construction contract deposit made on or after the effective
date of this Act. A deposit made before the effective date of this
Act is subject to the law in effect on the date of the deposit, and
that law is continued in effect for that purpose.
       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, 2007.