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A BILL TO BE ENTITLED
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AN ACT
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relating to performance and payment security for certain |
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comprehensive development agreements. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 223.205, Transportation Code, is amended |
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to read as follows: |
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Sec. 223.205. PERFORMANCE AND PAYMENT SECURITY. |
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(a) Notwithstanding Section 223.006 and the requirements of |
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Subchapter B, Chapter 2253, Government Code, the department shall |
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require a private entity entering into a comprehensive development |
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agreement under this subchapter to provide a performance and |
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payment bond issued by a corporate surety authorized to issue |
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surety bonds in this state or an alternative form of security in an |
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amount sufficient to: |
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(1) ensure the proper performance of the agreement; |
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and |
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(2) protect: |
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(A) the department; and |
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(B) contractors, subcontractors, and suppliers |
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[payment bond beneficiaries] who have a direct contractual |
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relationship with the private entity or with a subcontractor of the |
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private entity to supply labor or material for the project. |
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(b) Except as provided by Subsection (c), the [A] |
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performance and payment bond or alternative form of security shall |
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be in an amount equal to the cost of constructing [or maintaining] |
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the project. |
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(c) If the contract price exceeds $250 million in |
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construction costs, and the department determines that it is |
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impracticable for a private entity to provide security in the |
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amount described by Subsection (b), the department shall set the |
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amount of [the bonds or the alternative forms of] security at not |
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less than $250 million. |
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(c-1) The department may require an additional amount of |
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security or other form of guaranty acceptable to the department in |
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addition to the amount set by the department under Subsection (c) if |
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the department determines that additional security or guaranty is |
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required to achieve the objectives of Subsection (a). |
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(d) The performance [A payment or performance bond or
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alternative form of] security is not required for and may not cover |
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the portion of an agreement that includes only preliminary design |
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or planning services, the performance of preliminary studies, or |
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the acquisition of real property. |
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(e) The amount of the payment security is separate from and |
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in addition to the performance security and must not be less than |
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the amount of the performance security. |
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(f) In addition to or instead of a performance and payment |
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bond issued by a corporate surety authorized to issue surety bonds |
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in this state, the department may require one or more of the |
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following alternative forms of security: |
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(1) a cashier's check drawn on a financial entity |
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specified by the department; |
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(2) a United States bond or note; or |
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(3) an irrevocable bank letter of credit from a |
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financial institution acceptable to the department that has an |
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office in this state at which the letter of credit may be presented |
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for payment [; or
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[(4)
any other form of security determined suitable by
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the department]. |
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(g) The department by rule shall prescribe requirements for |
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an alternative form of security provided under this section. |
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(h) If the department authorizes payment security to be |
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provided by a means other than a payment bond issued by a corporate |
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surety authorized to issue surety bonds in this state, the |
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comprehensive development agreement must include provisions |
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specifying how a claimant may submit a claim and how the claim |
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process will be administered. The department shall post the claims |
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procedures for the project on its website. |
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SECTION 2. Section 366.404, Transportation Code, is amended |
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to read as follows: |
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Sec. 366.404. PERFORMANCE AND PAYMENT SECURITY. |
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(a) Notwithstanding the requirements of Subchapter B, Chapter |
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2253, Government Code, an authority shall require a private entity |
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entering into a comprehensive development agreement under this |
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subchapter to provide a performance and payment bond issued by a |
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|
corporate surety authorized to issue surety bonds in this state or |
|
|
an alternative form of security in an amount sufficient to: |
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|
(1) ensure the proper performance of the agreement; |
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|
and |
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|
(2) protect: |
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|
(A) the authority; and |
|
|
(B) contractors, subcontractors, and suppliers |
|
|
[payment bond beneficiaries] who have a direct contractual |
|
|
relationship with the private entity or with a subcontractor of the |
|
|
private entity to supply labor or material for the project. |
|
|
(b) Except as provided by Subsection (c), the [A] |
|
|
performance and payment bond or alternative form of security shall |
|
|
be in an amount equal to the cost of constructing [or maintaining] |
|
|
the project. |
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|
(c) If the contract price exceeds $250 million in |
|
|
construction costs, and the [an] authority determines that it is |
|
|
impracticable for a private entity to provide security in the |
|
|
amount described by Subsection (b), the authority shall set the |
|
|
amount of [the bonds or the alternative forms of] security at not |
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|
less than $250 million. |
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|
(c-1) The authority may require an additional amount of |
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|
security or other form of guaranty acceptable to the authority in |
|
|
addition to the amount set by the authority under Subsection (c) if |
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|
the authority determines that additional security or guaranty is |
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|
required to achieve the objectives of Subsection (a). |
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(d) The performance [A payment or performance bond or
|
|
|
alternative form of] security is not required for and may not cover |
|
|
the portion of an agreement that includes only preliminary design |
|
|
or planning services, the performance of preliminary studies, or |
|
|
the acquisition of real property. |
|
|
(e) The amount of the payment security is separate from and |
|
|
in addition to the performance security and must not be less than |
|
|
the amount of the performance security. |
|
|
(f) In addition to, or instead of, performance and payment |
|
|
bonds issued by a corporate surety authorized to issue surety bonds |
|
|
in this state, an authority may require the following alternative |
|
|
forms of security: |
|
|
(1) a cashier's check drawn on a financial entity |
|
|
specified by the authority; |
|
|
(2) a United States bond or note; or |
|
|
(3) an irrevocable bank letter of credit from a |
|
|
financial institution acceptable to the authority that has an |
|
|
office in this state at which the letter of credit may be presented |
|
|
for payment [; or
|
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|
[(4)
any other form of security determined suitable by
|
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|
the authority]. |
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|
(g) An authority by rule shall prescribe requirements for |
|
|
alternative forms of security provided under this section. |
|
|
(h) If the authority authorizes payment security to be |
|
|
provided by a means other than a payment bond issued by a corporate |
|
|
surety authorized to issue surety bonds in this state, the |
|
|
comprehensive development agreement must include provisions |
|
|
specifying how a claimant may submit a claim and how the claim |
|
|
process will be administered. The authority shall post the claims |
|
|
procedures for the project on its website. |
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|
SECTION 3. Section 370.308, Transportation Code, is amended |
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to read as follows: |
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Sec. 370.308. PERFORMANCE AND PAYMENT SECURITY. |
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|
(a) Notwithstanding Section 223.006 and the requirements of |
|
|
Subchapter B, Chapter 2253, Government Code, an authority shall |
|
|
require a private entity entering into a comprehensive development |
|
|
agreement under Section 370.305 to provide a performance and |
|
|
payment bond issued by a corporate surety authorized to issue |
|
|
surety bonds in this state or an alternative form of security in an |
|
|
amount sufficient to: |
|
|
(1) ensure the proper performance of the agreement; |
|
|
and |
|
|
(2) protect: |
|
|
(A) the authority; and |
|
|
(B) contractors, subcontractors, and suppliers |
|
|
[payment bond beneficiaries] who have a direct contractual |
|
|
relationship with the private entity or with a subcontractor of the |
|
|
private entity to supply labor or material for the project. |
|
|
(b) Except as provided by Subsection (c), the [A] |
|
|
performance and payment bond or alternative form of security shall |
|
|
be in an amount equal to the cost of constructing [or maintaining] |
|
|
the project. |
|
|
(c) If the contract price exceeds $250 million in |
|
|
construction costs, and the [an] authority determines that it is |
|
|
impracticable for a private entity to provide security in the |
|
|
amount described by Subsection (b), the authority shall set the |
|
|
amount of [the bonds or the alternative forms of] security at not |
|
|
less than $250 million. |
|
|
(c-1) The authority may require an additional amount of |
|
|
security or other form of guaranty acceptable to the authority in |
|
|
addition to the amount set by the authority under Subsection (c) if |
|
|
the authority determines that additional security or guaranty is |
|
|
required to achieve the objectives of Subsection (a). |
|
|
(d) The performance [A payment or performance bond or
|
|
|
alternative form of] security is not required for and may not cover |
|
|
the portion of an agreement that includes only preliminary design |
|
|
or planning services, the performance of preliminary studies, or |
|
|
the acquisition of real property. |
|
|
(e) The amount of the payment security is separate from and |
|
|
in addition to the performance security and must not be less than |
|
|
the amount of the performance security. |
|
|
(f) In addition to performance and payment bonds issued by a |
|
|
corporate surety authorized to issue surety bonds in this state, an |
|
|
authority may require the following alternative forms of security: |
|
|
(1) a cashier's check drawn on a financial entity |
|
|
specified by the authority; |
|
|
(2) a United States bond or note; or |
|
|
(3) an irrevocable bank letter of credit from a |
|
|
financial institution acceptable to the authority that has an |
|
|
office in this state at which the letter of credit may be presented |
|
|
for payment [; or
|
|
|
[(4)
any other form of security determined suitable by
|
|
|
the authority]. |
|
|
(g) An authority by rule shall prescribe requirements for |
|
|
alternative forms of security provided under this section. |
|
|
(h) If the authority authorizes payment security to be |
|
|
provided by a means other than a payment bond issued by a corporate |
|
|
surety authorized to issue surety bonds in this state, the |
|
|
comprehensive development agreement must include provisions |
|
|
specifying how a claimant may submit a claim and how the claim |
|
|
process will be administered. The authority shall post the claims |
|
|
procedures for the project on its website. |
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|
SECTION 4. The changes in law made by this Act apply only to |
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a comprehensive development agreement for which a best value |
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proposer is selected on or after the effective date of this Act. A |
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comprehensive development agreement for which a best value proposer |
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was selected before that date is governed by the law as it existed |
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at the time the best value proposer was selected, and the former law |
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is continued in effect for that purpose. |
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SECTION 5. This Act takes effect September 1, 2013. |