Texas 2011 - 82nd Regular

Texas House Bill HB2032 Compare Versions

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1	1	82R22309 JTS-F
2	2	By: Darby H.B. No. 2032
3	3	Substitute the following for H.B. No. 2032:
4	4	By: Harper-Brown C.S.H.B. No. 2032
5	5
6	6
7	7	A BILL TO BE ENTITLED
8	8	AN ACT
9	9	relating to performance and payment security for certain
10	10	comprehensive development agreements.
11	11	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
12	12	SECTION 1. Section 223.205, Transportation Code, is amended
13	13	to read as follows:
14	14	Sec. 223.205. PERFORMANCE AND PAYMENT SECURITY.
15	15	(a) Notwithstanding Section 223.006 and the requirements of
16	16	Subchapter B, Chapter 2253, Government Code, the department shall
17	17	require a private entity entering into a comprehensive development
18	18	agreement under this subchapter to provide a performance and
19	19	payment bond issued by a corporate surety authorized to issue bonds
20	20	in this state or an alternative form of security in an amount
21	21	sufficient to:
22	22	(1) ensure the proper performance of the agreement;
23	23	and
24	24	(2) protect:
25	25	(A) the department; and
26	26	(B) security [payment bond] beneficiaries who
27	27	have a direct contractual relationship with the private entity or a
28	28	subcontractor of the private entity to supply labor or material.
29	29	(b) Except as provided by Subsection (c), the [A
30	30	performance and payment bond or alternative form of] security shall
31	31	be in an amount equal to the cost of constructing or maintaining the
32	32	project.
33	33	(c) If the contract amount exceeds $250 million in
34	34	construction costs, and the department determines that it is
35	35	impracticable for a private entity to provide security in the
36	36	amount described by Subsection (b), the department may [shall] set
37	37	the amount of the [bonds or the alternative forms of] security at or
38	38	above $250 million, as determined by the department to be in the
39	39	best interest of this state.
40	40	(d) The [A payment or performance bond or alternative form
41	41	of] security is not required for and may not cover the portion of an
42	42	agreement that includes only design or planning services, the
43	43	performance of preliminary studies, or the acquisition of real
44	44	property.
45	45	(e) The amount of the payment security must not be less than
46	46	the amount of the performance security.
47	47	(f) In addition to or instead of a performance and payment
48	48	bond, the department may require one or more of the following
49	49	alternative forms of security:
50	50	(1) a cashier's check drawn on a financial entity
51	51	specified by the department;
52	52	(2) a United States bond or note; or
53	53	(3) an irrevocable bank letter of credit from a United
54	54	States domiciled bank acceptable to the department [; or
55	55	[(4) any other form of security determined suitable by
56	56	the department].
57	57	[(g) The department by rule shall prescribe requirements
58	58	for an alternative form of security provided under this section.]
59	59	SECTION 2. Section 366.404, Transportation Code, is amended
60	60	to read as follows:
61	61	Sec. 366.404. PERFORMANCE AND PAYMENT SECURITY.
62	62	(a) Notwithstanding the requirements of Subchapter B, Chapter
63	63	2253, Government Code, an authority shall require a private entity
64	64	entering into a comprehensive development agreement under this
65	65	subchapter to provide a performance and payment bond issued by a
66	66	corporate surety authorized to issue bonds in this state or an
67	67	alternative form of security in an amount sufficient to:
68	68	(1) ensure the proper performance of the agreement;
69	69	and
70	70	(2) protect:
71	71	(A) the authority; and
72	72	(B) security [payment bond] beneficiaries who
73	73	have a direct contractual relationship with the private entity or a
74	74	subcontractor of the private entity to supply labor or material.
75	75	(b) Except as provided by Subsection (c), the [A performance
76	76	and payment bond or alternative form of] security shall be in an
77	77	amount equal to the cost of constructing or maintaining the
78	78	project.
79	79	(c) If the contract amount exceeds $250 million in
80	80	construction costs, and the [an] authority determines that it is
81	81	impracticable for a private entity to provide security in the
82	82	amount described by Subsection (b), the authority may [shall] set
83	83	the amount of the [bonds or the alternative forms of] security at or
84	84	above $250 million, as determined by the authority to be in the
85	85	authority's best interest.
86	86	(d) The [A payment or performance bond or alternative form
87	87	of] security is not required for and may not cover the portion of an
88	88	agreement that includes only design or planning services, the
89	89	performance of preliminary studies, or the acquisition of real
90	90	property.
91	91	(e) The amount of the payment security must not be less than
92	92	the amount of the performance security.
93	93	(f) In addition to, or instead of, performance and payment
94	94	bonds, an authority may require the following alternative forms of
95	95	security:
96	96	(1) a cashier's check drawn on a financial entity
97	97	specified by the authority;
98	98	(2) a United States bond or note; or
99	99	(3) an irrevocable bank letter of credit from a United
100	100	States domiciled bank acceptable to the authority [; or
101	101	[(4) any other form of security determined suitable by
102	102	the authority].
103	103	[(g) An authority by rule shall prescribe requirements for
104	104	alternative forms of security provided under this section.]
105	105	SECTION 3. Section 370.308, Transportation Code, is amended
106	106	to read as follows:
107	107	Sec. 370.308. PERFORMANCE AND PAYMENT SECURITY.
108	108	(a) Notwithstanding Section 223.006 and the requirements of
109	109	Subchapter B, Chapter 2253, Government Code, an authority shall
110	110	require a private entity entering into a comprehensive development
111	111	agreement under Section 370.305 to provide a performance and
112	112	payment bond issued by a corporate surety authorized to issue bonds
113	113	in this state or an alternative form of security in an amount
114	114	sufficient to:
115	115	(1) ensure the proper performance of the agreement;
116	116	and
117	117	(2) protect:
118	118	(A) the authority; and
119	119	(B) security [payment bond] beneficiaries who
120	120	have a direct contractual relationship with the private entity or a
121	121	subcontractor of the private entity to supply labor or material.
122	122	(b) Except as provided by Subsection (c), the [A performance
123	123	and payment bond or alternative form of] security shall be in an
124	124	amount equal to the cost of constructing or maintaining the
125	125	project.
126	126	(c) If the contract amount exceeds $250 million in
127	127	construction costs, and the [an] authority determines that it is
128	128	impracticable for a private entity to provide security in the
129	129	amount described by Subsection (b), the authority may [shall] set
130	130	the amount of the [bonds or the alternative forms of] security at or
131	131	above $250 million, as determined by the authority to be in the
132	132	authority's best interest.
133	133	(d) The [A payment or performance bond or alternative form
134	134	of] security is not required for and may not cover the portion of an
135	135	agreement that includes only design or planning services, the
136	136	performance of preliminary studies, or the acquisition of real
137	137	property.
138	138	(e) The amount of the payment security must not be less than
139	139	the amount of the performance security.
140	140	(f) In addition to performance and payment bonds, an
141	141	authority may require the following alternative forms of security:
142	142	(1) a cashier's check drawn on a financial entity
143	143	specified by the authority;
144	144	(2) a United States bond or note; or
145	145	(3) an irrevocable bank letter of credit from a United
146	146	States domiciled bank acceptable to the authority [; or
147	147	[(4) any other form of security determined suitable by
148	148	the authority].
149	149	[(g) An authority by rule shall prescribe requirements for
150	150	alternative forms of security provided under this section.]
151	151	SECTION 4. The changes in law made by this Act apply only to
152	152	a comprehensive development agreement for which a best value
153	153	proposer is selected on or after the effective date of this Act. A
154	154	comprehensive development agreement for which a best value proposer
155	155	was selected before that date is governed by the law as it existed
156	156	at the time the best value proposer was selected, and the former law
157	157	is continued in effect for that purpose.
158	158	SECTION 5. This Act takes effect September 1, 2011.