Texas House Bill HB1134

Texas 2013 - 83rd Regular

Caption

Relating to performance and payment security for certain comprehensive development agreements.

Impact

The changes proposed in HB 1134 significantly impact the Transportation Code by introducing clear financial security requirements for large-scale construction projects. Notably, projects with costs exceeding $250 million have specific stipulations regarding the security amounts, emphasizing the necessity of ensuring that private entities can fulfill their contractual obligations. The bill acknowledges that, under certain conditions, it may be impractical for entities to provide security based on standard measures and allows for adjustments in required amounts based on evaluation by the Texas Department of Transportation (TxDOT).

Summary

House Bill 1134 addresses the regulations surrounding performance and payment security specifically related to comprehensive development agreements (CDAs) within the state of Texas. The bill mandates that any private entity engaging in a CDA must provide a performance and payment bond issued by a corporate surety authorized in Texas or an alternative form of security, ensuring that the obligations of the agreements are adequately backed. This legislative measure is intended to enhance the financial reliability of such agreements and protect the interests of the state as well as contractors involved in construction or related services.

Enactment

If enacted, the changes brought forth by HB 1134 will be applicable only to comprehensive development agreements for which a best value proposer is selected on or after the effective date of the Act. This clause suggests a deliberate approach to transitioning existing contracts to the new regulatory framework, allowing for existing agreements to remain governed by former regulations, thereby minimizing disruption for ongoing projects.

Contention

While the bill aims to safeguard the interests of various stakeholders involved in CDAs, opponents may argue that these requirements could pose a barrier to entry for smaller companies in the construction sector. Critics might express concern over the potential for increased costs associated with meeting these requirements, thus limiting competition in public bidding processes. Additionally, discussions may arise on the flexibility of the proposed security measures, particularly regarding alternative forms of security that can be provided and how effectively they can be enforced and managed.