84R16169 T
By: Workman H.B. No. 3939
A BILL TO BE ENTITLED
AN ACT
Relating to the requirements for construction contracts for certain
public works projects.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 2252.032, Government Code, is amended to
read as follows: Sec. 2252.032. RETAINAGE (a) A governmental entity
shall:
(1) deposit in an interest-bearing account the
retainage of a public works contract that provides for retainage of
a portion [more than five percent] of the periodic contract
payment; and
(2) pay the interest earned on the retainage to the
prime contractor on completion of the contract.
(b) A governmental entity may not:
(1) withhold retainage in excess of five percent of
the agreed contract price without the express written consent of
all parties to the contract;
(2) withhold retainage in excess of one percent of the
agreed contract price, excluding interest earned on the retainage,
if the public work covered by the contract is capable of being used
for the intended purpose of the public work; and
(3) items constituting additional withholding or
retainage added to the schedule of values, general contract
conditions, are prohibited.
(d) Withholding retainage for non-allocated project funds,
or during the warranty period is prohibited.
SECTION 2. Section 203.0941(a), Transportation Code, is
amended to read as follows:
(a) The relocation of a utility facility required by
improvement of any segment of the state highway system, for which a
political subdivision receives financial assistance made available
from either Subchapter D, F, G, or K, Chapter 17, Water Code, is not
subject to the requirements of Sections 17.183(a)(1)-(5)
[17.183(1)-(6)], Water Code, if the political subdivision has
agreed to allow the department to contract for the construction of
the utility facility relocation.
SECTION 3. Section 17.183, Water Code, is amended by
amending Subsections (a) and (c) and adding Subsections (a-1) and
(f) to read as follows:
(a) The governing body of each political subdivision
receiving financial assistance from the board shall require in all
contracts for the construction of a project:
(1) that each bidder furnish a bid guarantee
equivalent to five percent of the bid price;
(2) that each contractor awarded a construction
contract furnish performance and payment bonds;
(A) the performance bond shall include without
limitation guarantees that work done under the contract will be
completed and performed according to approved plans and
specifications[ and in accordance with sound construction
principles and practices; and]
(B) the performance and payment bonds shall be in
a penal sum of not less than 100 percent of the contract price[ and
remain in effect for one year beyond the date of approval by the
engineer of the political subdivision];
(3) that payment be made in partial payments as the
work progresses;
(4) that each partial payment shall not exceed 95
percent of the amount due at the time of the payment as shown by the
engineer of the project, but, if the project is substantially
complete or is capable of being used for its intended purpose;
(A) the political subdivision may not withhold
retainage in excess of one percent of the agreed contract price,
excluding interest earned on the retainage, [partial] and partial
release of [the five percent] the remaining retainage [may] shall
be made by the political subdivision [with approval of the
executive administrator];
(5) that payment of the retainage remaining due upon
completion of the contract shall be made only after:
(A) approval by the engineer for the political
subdivision as required under the bond proceedings;
(B) approval by the governing body of the
political subdivision by a resolution or other formal action; and
(C) certification by the engineer for the project
[executive administrator in accordance with the rules of the board]
that the work to be done under the contract has been completed[and
performed in a satisfactory manner and]in accordance with approved
plans and specifications and in accordance with the rules of the
board;
(6) [that no valid approval may be granted unless the
work done under the contract has been completed and performed in a
satisfactory manner according to approved plans and
specifications;
(7) that, if a political subdivision receives
[receiving] financial assistance under Subchapter K [of this
chapter], labor from inside the political subdivision be used to
the extent possible;
SECTION 4. The changes in law made by this Act apply only to
a contract entered into on or after the effective date of this Act.
A contract entered into before the effective date of this Act is
governed by the law in effect when the contract was entered into,
and the former law is continued in effect for that purpose.
SECTION 5. EFFECTIVE DATE. This Act takes effect
immediately if it receives a vote of two-thirds of all the members
elected to each house, as provided by Section 39, Article III, Texas
Constitution. If this Act does not receive the vote necessary for
immediate effect, this Act takes effect September 1, 2015.