Texas 2017 - 85th Regular

Texas House Bill HB2204 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	85R8216 JAM-F
2	2	By: Kacal H.B. No. 2204
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to the requirements for construction contracts for certain
8	8	water supply projects, treatment works, and flood control measures.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Section 17.183, Water Code, is amended by
11	11	amending Subsections (a), (b), (c), and (d) and adding Subsection
12	12	(f) to read as follows:
13	13	(a) The governing body of each political subdivision
14	14	receiving financial assistance from the board shall require in all
15	15	contracts for the construction of a project:
16	16	(1) that each bidder furnish a bid guarantee
17	17	equivalent to five percent of the bid price;
18	18	(2) that each contractor awarded a construction
19	19	contract furnish performance and payment bonds that meet the
20	20	following requirements:
21	21	(A) the performance bond shall include without
22	22	limitation guarantees that work done under the contract will be
23	23	completed and performed according to approved plans and
24	24	specifications and in accordance with sound construction
25	25	principles and practices; and
26	26	(B) the performance and payment bonds shall be in
27	27	a penal sum of not less than 100 percent of the contract price and
28	28	remain in effect for one year beyond the date of approval by the
29	29	engineer of the political subdivision;
30	30	(3) that payment be made in partial payments as the
31	31	work progresses;
32	32	(4) that each partial payment shall not exceed 95
33	33	percent of the amount due at the time of the payment as shown by the
34	34	engineer of the project, but, if the project is substantially
35	35	complete, a partial release of the five percent retainage may be
36	36	made by the political subdivision with approval of the executive
37	37	administrator;
38	38	(5) that payment of the retainage remaining due upon
39	39	completion of the contract shall be made only after:
40	40	(A) approval by the engineer for the political
41	41	subdivision as required under the bond proceedings;
42	42	(B) approval by the governing body of the
43	43	political subdivision by a resolution or other formal action; and
44	44	(C) certification by the executive administrator
45	45	in accordance with the rules of the board that the work to be done
46	46	under the contract has been completed and performed in a
47	47	satisfactory manner and in accordance with approved plans and
48	48	specifications;
49	49	(6) that no valid approval may be granted unless the
50	50	work done under the contract has been completed and performed in a
51	51	satisfactory manner according to approved plans and
52	52	specifications;
53	53	(7) that, if a political subdivision receiving
54	54	financial assistance under Subchapter K of this chapter, labor from
55	55	inside the political subdivision be used to the extent possible;
56	56	and
57	57	(8) that the contract include a requirement that iron
58	58	and steel products [and manufactured goods] used in the project be
59	59	produced in the United States, unless:
60	60	(A) such products [or goods] are not:
61	61	(i) available in sufficient quantities;
62	62	(ii) readily available; or
63	63	(iii) of a satisfactory quality; [or]
64	64	(B) the use of such products [or goods] will
65	65	increase the total cost of the project by more than 20 percent; or
66	66	(C) the use of iron and steel products that are
67	67	not produced in the United States is incidental or de minimis and:
68	68	(i) the cost of each individual iron or
69	69	steel product used in the project that is not produced in the United
70	70	States does not exceed one percent of the total cost of the
71	71	materials incorporated into the project; and
72	72	(ii) the cost of all iron and steel products
73	73	used in the project that are not produced in the United States does
74	74	not exceed five percent of the total cost of the materials
75	75	incorporated into the project.
76	76	(b) Plans and specifications submitted to the board in
77	77	connection with an application for financial assistance must
78	78	include a seal by a licensed engineer affirming that the plans and
79	79	specifications:
80	80	(1) are consistent with the requirement regarding the
81	81	use of iron and steel products under Subsection (a)(8); and
82	82	(2) conform to current industry design and
83	83	construction standards.
84	84	(c) For the purposes of Subsection [Subsections] (a)(8)
85	85	[and (d)]:
86	86	(1) "Iron and steel products" means iron and steel
87	87	products produced as the result of a manufacturing process and:
88	88	(A) includes lined or unlined pipes or fittings,
89	89	carbon steel fasteners, manhole covers, municipal castings,
90	90	hydrant tanks, flanges, pipe clamps and restraints, valves,
91	91	structural steel, and reinforced precast concrete; and
92	92	(B) does not include mechanical or electrical
93	93	components, equipment, controls, or systems or necessary
94	94	appurtenances of such components, equipment, controls, or systems
95	95	used to process or treat water ["Component" means any article,
96	96	material, or supply, whether a manufactured good or raw material,
97	97	that is directly incorporated into a manufactured good].
98	98	(2) ["Manufactured good" means an item produced as the
99	99	result of a manufacturing process.
100	100	[(3)] "Manufacturing process" means the application
101	101	of a process to alter the form or function of materials or elements
102	102	of a product in a manner that adds value and transforms the
103	103	materials or elements so that a new end product is produced that is
104	104	functionally different from the product that would result from
105	105	simple assembly of the materials or elements.
106	106	(3) [(4)] "Produced in the United States" means[:
107	107	[(A) in the case of] iron and steel products[,
108	108	products] for which:
109	109	(A) all manufacturing processes, from initial
110	110	melting through application of coatings, take place in the United
111	111	States, except metallurgical processes that involve the refinement
112	112	of steel additives; and
113	113	(B) at least 50 [in the case of a manufactured
114	114	good, a good for which:
115	115	[(i) all of the manufacturing process that
116	116	produced the manufactured good takes place in the United States;
117	117	and
118	118	[(ii) more than 60] percent of the
119	119	materials [components of the manufactured good], by cost, originate
120	120	in the United States.
121	121	(d) For the purposes of Subsection (c)(3)(B)
122	122	[(c)(4)(B)(ii), if a component originates in the United States],
123	123	the entire cost of the materials [that component] contributes to
124	124	the determination of whether the iron and steel products are
125	125	produced [the percentage of the components of the manufactured good
126	126	that originate] in the United States.
127	127	(f) The board shall adopt rules to:
128	128	(1) promote compliance with the requirements of this
129	129	section; and
130	130	(2) establish and administer a system that allows for
131	131	the waiver of the requirements of this section as necessary.
132	132	SECTION 2. Section 17.183, Water Code, as amended by this
133	133	Act, applies only to a contract entered into on or after the
134	134	effective date of this Act. A contract entered into before the
135	135	effective date of this Act is governed by the law in effect when the
136	136	contract was entered into, and the former law is continued in effect
137	137	for that purpose.
138	138	SECTION 3. This Act takes effect immediately if it receives
139	139	a vote of two-thirds of all the members elected to each house, as
140	140	provided by Section 39, Article III, Texas Constitution. If this
141	141	Act does not receive the vote necessary for immediate effect, this
142	142	Act takes effect September 1, 2017.