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A BILL TO BE ENTITLED
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AN ACT
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Relating to the requirements for construction contracts for certain |
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public works projects. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 2252.032, Government Code, is amended to |
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read as follows: Sec. 2252.032. RETAINAGE (a) A governmental entity |
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shall: |
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(1) deposit in an interest-bearing account the |
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retainage of a public works contract that provides for retainage of |
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a portion [more than five percent] of the periodic contract |
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payment; and |
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(2) pay the interest earned on the retainage to the |
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prime contractor on completion of the contract. |
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(b) A governmental entity may not: |
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(1) withhold retainage in excess of five percent of |
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the agreed contract price without the express written consent of |
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all parties to the contract; |
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(2) withhold retainage in excess of one percent of the |
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agreed contract price, excluding interest earned on the retainage, |
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if the public work covered by the contract is capable of being used |
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for the intended purpose of the public work; and |
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(3) items constituting additional withholding or |
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retainage added to the schedule of values, general contract |
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conditions, are prohibited. |
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(d) Withholding retainage for non-allocated project funds, |
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or during the warranty period is prohibited. |
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SECTION 2. Section 203.0941(a), Transportation Code, is |
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amended to read as follows: |
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(a) The relocation of a utility facility required by |
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improvement of any segment of the state highway system, for which a |
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political subdivision receives financial assistance made available |
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from either Subchapter D, F, G, or K, Chapter 17, Water Code, is not |
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subject to the requirements of Sections 17.183(a)(1)-(5) |
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[17.183(1)-(6)], Water Code, if the political subdivision has |
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agreed to allow the department to contract for the construction of |
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the utility facility relocation. |
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SECTION 3. Section 17.183, Water Code, is amended by |
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amending Subsections (a) and (c) and adding Subsections (a-1) and |
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(f) to read as follows: |
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(a) The governing body of each political subdivision |
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receiving financial assistance from the board shall require in all |
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contracts for the construction of a project: |
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(1) that each bidder furnish a bid guarantee |
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equivalent to five percent of the bid price; |
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(2) that each contractor awarded a construction |
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contract furnish performance and payment bonds; |
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(A) the performance bond shall include without |
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limitation guarantees that work done under the contract will be |
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completed and performed according to approved plans and |
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specifications[ and in accordance with sound construction
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principles and practices; and] |
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(B) the performance and payment bonds shall be in |
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a penal sum of not less than 100 percent of the contract price[ and
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remain in effect for one year beyond the date of approval by the
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engineer of the political subdivision];
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(3) that payment be made in partial payments as the |
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work progresses; |
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(4) that each partial payment shall not exceed 95 |
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percent of the amount due at the time of the payment as shown by the |
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engineer of the project, but, if the project is substantially |
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complete or is capable of being used for its intended purpose; |
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(A) the political subdivision may not withhold |
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retainage in excess of one percent of the agreed contract price, |
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excluding interest earned on the retainage, [partial] and partial |
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release of [the five percent] the remaining retainage [may] shall |
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be made by the political subdivision [with approval of the
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executive administrator]; |
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(5) that payment of the retainage remaining due upon |
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completion of the contract shall be made only after: |
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(A) approval by the engineer for the political |
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subdivision as required under the bond proceedings; |
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(B) approval by the governing body of the |
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political subdivision by a resolution or other formal action; and |
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(C) certification by the engineer for the project |
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[executive administrator in accordance with the rules of the board] |
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that the work to be done under the contract has been completed[and
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performed in a satisfactory manner and]in accordance with approved |
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plans and specifications and in accordance with the rules of the |
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board; |
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(6) [that no valid approval may be granted unless the
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work done under the contract has been completed and performed in a
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satisfactory manner according to approved plans and
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specifications; |
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(7) that, if a political subdivision receives |
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[receiving] financial assistance under Subchapter K [of this
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chapter], labor from inside the political subdivision be used to |
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the extent possible; |
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SECTION 4. The changes in law made by this Act apply only to |
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a contract entered into on or after the effective date of this Act. |
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A contract entered into before the effective date of this Act is |
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governed by the law in effect when the contract was entered into, |
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and the former law is continued in effect for that purpose. |
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SECTION 5. EFFECTIVE DATE. This Act takes effect |
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immediately if it receives a vote of two-thirds of all the members |
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elected to each house, as provided by Section 39, Article III, Texas |
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Constitution. If this Act does not receive the vote necessary for |
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immediate effect, this Act takes effect September 1, 2015. |