Texas 2013 - 83rd Regular

Texas House Bill HB1134 Compare Versions

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1	1	83R22850 JTS-F
2	2	By: Darby H.B. No. 1134
3	3	Substitute the following for H.B. No. 1134:
4	4	By: Phillips C.S.H.B. No. 1134
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
20	20	surety bonds in this state or an alternative form of security in an
21	21	amount 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) contractors, subcontractors, and suppliers
27	27	[payment bond beneficiaries] who have a direct contractual
28	28	relationship with the private entity or with a subcontractor of the
29	29	private entity to supply labor or material for the project.
30	30	(b) Except as provided by Subsection (c), the [A]
31	31	performance and payment bond or alternative form of security shall
32	32	be in an amount equal to the cost of constructing [or maintaining]
33	33	the project.
34	34	(c) If the contract price exceeds $250 million in
35	35	construction costs, and the department determines that it is
36	36	impracticable for a private entity to provide security in the
37	37	amount described by Subsection (b), the department shall set the
38	38	amount of [the bonds or the alternative forms of] security at not
39	39	less than $250 million.
40	40	(c-1) The department may require an additional amount of
41	41	security or other form of guaranty acceptable to the department in
42	42	addition to the amount set by the department under Subsection (c) if
43	43	the department determines that additional security or guaranty is
44	44	required to achieve the objectives of Subsection (a).
45	45	(d) The performance [A payment or performance bond or
46	46	alternative form of] security is not required for and may not cover
47	47	the portion of an agreement that includes only preliminary design
48	48	or planning services, the performance of preliminary studies, or
49	49	the acquisition of real property.
50	50	(e) The amount of the payment security is separate from and
51	51	in addition to the performance security and must not be less than
52	52	the amount of the performance security.
53	53	(f) In addition to or instead of a performance and payment
54	54	bond issued by a corporate surety authorized to issue surety bonds
55	55	in this state, the department may require one or more of the
56	56	following alternative forms of security:
57	57	(1) a cashier's check drawn on a financial entity
58	58	specified by the department;
59	59	(2) a United States bond or note; or
60	60	(3) an irrevocable bank letter of credit from a
61	61	financial institution acceptable to the department that has an
62	62	office in this state at which the letter of credit may be presented
63	63	for payment [; or
64	64	[(4) any other form of security determined suitable by
65	65	the department].
66	66	(g) The department by rule shall prescribe requirements for
67	67	an alternative form of security provided under this section.
68	68	(h) If the department authorizes payment security to be
69	69	provided by a means other than a payment bond issued by a corporate
70	70	surety authorized to issue surety bonds in this state, the
71	71	comprehensive development agreement must include provisions
72	72	specifying how a claimant may submit a claim and how the claim
73	73	process will be administered. The department shall post the claims
74	74	procedures for the project on its website.
75	75	SECTION 2. Section 366.404, Transportation Code, is amended
76	76	to read as follows:
77	77	Sec. 366.404. PERFORMANCE AND PAYMENT SECURITY.
78	78	(a) Notwithstanding the requirements of Subchapter B, Chapter
79	79	2253, Government Code, an authority shall require a private entity
80	80	entering into a comprehensive development agreement under this
81	81	subchapter to provide a performance and payment bond issued by a
82	82	corporate surety authorized to issue surety bonds in this state or
83	83	an alternative form of security in an amount sufficient to:
84	84	(1) ensure the proper performance of the agreement;
85	85	and
86	86	(2) protect:
87	87	(A) the authority; and
88	88	(B) contractors, subcontractors, and suppliers
89	89	[payment bond beneficiaries] who have a direct contractual
90	90	relationship with the private entity or with a subcontractor of the
91	91	private entity to supply labor or material for the project.
92	92	(b) Except as provided by Subsection (c), the [A]
93	93	performance and payment bond or alternative form of security shall
94	94	be in an amount equal to the cost of constructing [or maintaining]
95	95	the project.
96	96	(c) If the contract price exceeds $250 million in
97	97	construction costs, and the [an] authority determines that it is
98	98	impracticable for a private entity to provide security in the
99	99	amount described by Subsection (b), the authority shall set the
100	100	amount of [the bonds or the alternative forms of] security at not
101	101	less than $250 million.
102	102	(c-1) The authority may require an additional amount of
103	103	security or other form of guaranty acceptable to the authority in
104	104	addition to the amount set by the authority under Subsection (c) if
105	105	the authority determines that additional security or guaranty is
106	106	required to achieve the objectives of Subsection (a).
107	107	(d) The performance [A payment or performance bond or
108	108	alternative form of] security is not required for and may not cover
109	109	the portion of an agreement that includes only preliminary design
110	110	or planning services, the performance of preliminary studies, or
111	111	the acquisition of real property.
112	112	(e) The amount of the payment security is separate from and
113	113	in addition to the performance security and must not be less than
114	114	the amount of the performance security.
115	115	(f) In addition to, or instead of, performance and payment
116	116	bonds issued by a corporate surety authorized to issue surety bonds
117	117	in this state, an authority may require the following alternative
118	118	forms of security:
119	119	(1) a cashier's check drawn on a financial entity
120	120	specified by the authority;
121	121	(2) a United States bond or note; or
122	122	(3) an irrevocable bank letter of credit from a
123	123	financial institution acceptable to the authority that has an
124	124	office in this state at which the letter of credit may be presented
125	125	for payment [; or
126	126	[(4) any other form of security determined suitable by
127	127	the authority].
128	128	(g) An authority by rule shall prescribe requirements for
129	129	alternative forms of security provided under this section.
130	130	(h) If the authority authorizes payment security to be
131	131	provided by a means other than a payment bond issued by a corporate
132	132	surety authorized to issue surety bonds in this state, the
133	133	comprehensive development agreement must include provisions
134	134	specifying how a claimant may submit a claim and how the claim
135	135	process will be administered. The authority shall post the claims
136	136	procedures for the project on its website.
137	137	SECTION 3. Section 370.308, Transportation Code, is amended
138	138	to read as follows:
139	139	Sec. 370.308. PERFORMANCE AND PAYMENT SECURITY.
140	140	(a) Notwithstanding Section 223.006 and the requirements of
141	141	Subchapter B, Chapter 2253, Government Code, an authority shall
142	142	require a private entity entering into a comprehensive development
143	143	agreement under Section 370.305 to provide a performance and
144	144	payment bond issued by a corporate surety authorized to issue
145	145	surety bonds in this state or an alternative form of security in an
146	146	amount sufficient to:
147	147	(1) ensure the proper performance of the agreement;
148	148	and
149	149	(2) protect:
150	150	(A) the authority; and
151	151	(B) contractors, subcontractors, and suppliers
152	152	[payment bond beneficiaries] who have a direct contractual
153	153	relationship with the private entity or with a subcontractor of the
154	154	private entity to supply labor or material for the project.
155	155	(b) Except as provided by Subsection (c), the [A]
156	156	performance and payment bond or alternative form of security shall
157	157	be in an amount equal to the cost of constructing [or maintaining]
158	158	the project.
159	159	(c) If the contract price exceeds $250 million in
160	160	construction costs, and the [an] authority determines that it is
161	161	impracticable for a private entity to provide security in the
162	162	amount described by Subsection (b), the authority shall set the
163	163	amount of [the bonds or the alternative forms of] security at not
164	164	less than $250 million.
165	165	(c-1) The authority may require an additional amount of
166	166	security or other form of guaranty acceptable to the authority in
167	167	addition to the amount set by the authority under Subsection (c) if
168	168	the authority determines that additional security or guaranty is
169	169	required to achieve the objectives of Subsection (a).
170	170	(d) The performance [A payment or performance bond or
171	171	alternative form of] security is not required for and may not cover
172	172	the portion of an agreement that includes only preliminary design
173	173	or planning services, the performance of preliminary studies, or
174	174	the acquisition of real property.
175	175	(e) The amount of the payment security is separate from and
176	176	in addition to the performance security and must not be less than
177	177	the amount of the performance security.
178	178	(f) In addition to performance and payment bonds issued by a
179	179	corporate surety authorized to issue surety bonds in this state, an
180	180	authority may require the following alternative forms of security:
181	181	(1) a cashier's check drawn on a financial entity
182	182	specified by the authority;
183	183	(2) a United States bond or note; or
184	184	(3) an irrevocable bank letter of credit from a
185	185	financial institution acceptable to the authority that has an
186	186	office in this state at which the letter of credit may be presented
187	187	for payment [; or
188	188	[(4) any other form of security determined suitable by
189	189	the authority].
190	190	(g) An authority by rule shall prescribe requirements for
191	191	alternative forms of security provided under this section.
192	192	(h) If the authority authorizes payment security to be
193	193	provided by a means other than a payment bond issued by a corporate
194	194	surety authorized to issue surety bonds in this state, the
195	195	comprehensive development agreement must include provisions
196	196	specifying how a claimant may submit a claim and how the claim
197	197	process will be administered. The authority shall post the claims
198	198	procedures for the project on its website.
199	199	SECTION 4. The changes in law made by this Act apply only to
200	200	a comprehensive development agreement for which a best value
201	201	proposer is selected on or after the effective date of this Act. A
202	202	comprehensive development agreement for which a best value proposer
203	203	was selected before that date is governed by the law as it existed
204	204	at the time the best value proposer was selected, and the former law
205	205	is continued in effect for that purpose.
206	206	SECTION 5. This Act takes effect September 1, 2013.