Bill Text: TX HB1134 | 2013-2014 | 83rd Legislature | Engrossed

---

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

Spectrum: Partisan Bill (Republican 1-0)

Status: (Engrossed - Dead) 2013-05-07 - Referred to Transportation [HB1134 Detail]

Download: Texas-2013-HB1134-Engrossed.html

---

83R22850 JTS-F
By: Darby H.B. No. 1134

A BILL TO BE ENTITLED
AN ACT
relating to performance and payment security for certain
comprehensive development agreements.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 223.205, Transportation Code, is amended
to read as follows:
Sec. 223.205. PERFORMANCE AND PAYMENT SECURITY.
(a) Notwithstanding Section 223.006 and the requirements of
Subchapter B, Chapter 2253, Government Code, the department shall
require a private entity entering into a comprehensive development
agreement under this subchapter to provide a performance and
payment bond issued by a corporate surety authorized to issue
surety bonds in this state or an alternative form of security in an
amount sufficient to:
(1) ensure the proper performance of the agreement;
and
(2) protect:
(A) the department; and
(B) contractors, subcontractors, and suppliers
[payment bond beneficiaries] who have a direct contractual
relationship with the private entity or with a subcontractor of the
private entity to supply labor or material for the project.
(b) Except as provided by Subsection (c), the [A]
performance and payment bond or alternative form of security shall
be in an amount equal to the cost of constructing [or maintaining]
the project.
(c) If the contract price exceeds $250 million in
construction costs, and the department determines that it is
impracticable for a private entity to provide security in the
amount described by Subsection (b), the department shall set the
amount of [the bonds or the alternative forms of] security at not
less than $250 million.
(c-1) The department may require an additional amount of
security or other form of guaranty acceptable to the department in
addition to the amount set by the department under Subsection (c) if
the department determines that additional security or guaranty is
required to achieve the objectives of Subsection (a).
(d) The performance [A payment or performance bond or
alternative form of] security is not required for and may not cover
the portion of an agreement that includes only preliminary design
or planning services, the performance of preliminary studies, or
the acquisition of real property.
(e) The amount of the payment security is separate from and
in addition to the performance security and must not be less than
the amount of the performance security.
(f) In addition to or instead of a performance and payment
bond issued by a corporate surety authorized to issue surety bonds
in this state, the department may require one or more of the
following alternative forms of security:
(1) a cashier's check drawn on a financial entity
specified by the department;
(2) a United States bond or note; or
(3) an irrevocable bank letter of credit from a
financial institution acceptable to the department that has an
office in this state at which the letter of credit may be presented
for payment [; or
[(4) any other form of security determined suitable by
the department].
(g) The department by rule shall prescribe requirements for
an alternative form of security provided under this section.
(h) If the department authorizes payment security to be
provided by a means other than a payment bond issued by a corporate
surety authorized to issue surety bonds in this state, the
comprehensive development agreement must include provisions
specifying how a claimant may submit a claim and how the claim
process will be administered. The department shall post the claims
procedures for the project on its website.
SECTION 2. Section 366.404, Transportation Code, is amended
to read as follows:
Sec. 366.404. PERFORMANCE AND PAYMENT SECURITY.
(a) Notwithstanding the requirements of Subchapter B, Chapter
2253, Government Code, an authority shall require a private entity
entering into a comprehensive development agreement under this
subchapter to provide a performance and payment bond issued by a
corporate surety authorized to issue surety bonds in this state or
an alternative form of security in an amount sufficient to:
(1) ensure the proper performance of the agreement;
and
(2) protect:
(A) the authority; and
(B) contractors, subcontractors, and suppliers
[payment bond beneficiaries] who have a direct contractual
relationship with the private entity or with a subcontractor of the
private entity to supply labor or material for the project.
(b) Except as provided by Subsection (c), the [A]
performance and payment bond or alternative form of security shall
be in an amount equal to the cost of constructing [or maintaining]
the project.
(c) If the contract price exceeds $250 million in
construction costs, and the [an] authority determines that it is
impracticable for a private entity to provide security in the
amount described by Subsection (b), the authority shall set the
amount of [the bonds or the alternative forms of] security at not
less than $250 million.
(c-1) The authority may require an additional amount of
security or other form of guaranty acceptable to the authority in
addition to the amount set by the authority under Subsection (c) if
the authority determines that additional security or guaranty is
required to achieve the objectives of Subsection (a).
(d) The performance [A payment or performance bond or
alternative form of] security is not required for and may not cover
the portion of an agreement that includes only preliminary design
or planning services, the performance of preliminary studies, or
the acquisition of real property.
(e) The amount of the payment security is separate from and
in addition to the performance security and must not be less than
the amount of the performance security.
(f) In addition to, or instead of, performance and payment
bonds issued by a corporate surety authorized to issue surety bonds
in this state, an authority may require the following alternative
forms of security:
(1) a cashier's check drawn on a financial entity
specified by the authority;
(2) a United States bond or note; or
(3) an irrevocable bank letter of credit from a
financial institution acceptable to the authority that has an
office in this state at which the letter of credit may be presented
for payment [; or
[(4) any other form of security determined suitable by
the authority].
(g) An authority by rule shall prescribe requirements for
alternative forms of security provided under this section.
(h) If the authority authorizes payment security to be
provided by a means other than a payment bond issued by a corporate
surety authorized to issue surety bonds in this state, the
comprehensive development agreement must include provisions
specifying how a claimant may submit a claim and how the claim
process will be administered. The authority shall post the claims
procedures for the project on its website.
SECTION 3. Section 370.308, Transportation Code, is amended
to read as follows:
Sec. 370.308. PERFORMANCE AND PAYMENT SECURITY.
(a) Notwithstanding Section 223.006 and the requirements of
Subchapter B, Chapter 2253, Government Code, an authority shall
require a private entity entering into a comprehensive development
agreement under Section 370.305 to provide a performance and
payment bond issued by a corporate surety authorized to issue
surety bonds in this state or an alternative form of security in an
amount sufficient to:
(1) ensure the proper performance of the agreement;
and
(2) protect:
(A) the authority; and
(B) contractors, subcontractors, and suppliers
[payment bond beneficiaries] who have a direct contractual
relationship with the private entity or with a subcontractor of the
private entity to supply labor or material for the project.
(b) Except as provided by Subsection (c), the [A]
performance and payment bond or alternative form of security shall
be in an amount equal to the cost of constructing [or maintaining]
the project.
(c) If the contract price exceeds $250 million in
construction costs, and the [an] authority determines that it is
impracticable for a private entity to provide security in the
amount described by Subsection (b), the authority shall set the
amount of [the bonds or the alternative forms of] security at not
less than $250 million.
(c-1) The authority may require an additional amount of
security or other form of guaranty acceptable to the authority in
addition to the amount set by the authority under Subsection (c) if
the authority determines that additional security or guaranty is
required to achieve the objectives of Subsection (a).
(d) The performance [A payment or performance bond or
alternative form of] security is not required for and may not cover
the portion of an agreement that includes only preliminary design
or planning services, the performance of preliminary studies, or
the acquisition of real property.
(e) The amount of the payment security is separate from and
in addition to the performance security and must not be less than
the amount of the performance security.
(f) In addition to performance and payment bonds issued by a
corporate surety authorized to issue surety bonds in this state, an
authority may require the following alternative forms of security:
(1) a cashier's check drawn on a financial entity
specified by the authority;
(2) a United States bond or note; or
(3) an irrevocable bank letter of credit from a
financial institution acceptable to the authority that has an
office in this state at which the letter of credit may be presented
for payment [; or
[(4) any other form of security determined suitable by
the authority].
(g) An authority by rule shall prescribe requirements for
alternative forms of security provided under this section.
(h) If the authority authorizes payment security to be
provided by a means other than a payment bond issued by a corporate
surety authorized to issue surety bonds in this state, the
comprehensive development agreement must include provisions
specifying how a claimant may submit a claim and how the claim
process will be administered. The authority shall post the claims
procedures for the project on its website.
SECTION 4. The changes in law made by this Act apply only to
a comprehensive development agreement for which a best value
proposer is selected on or after the effective date of this Act. A
comprehensive development agreement for which a best value proposer
was selected before that date is governed by the law as it existed
at the time the best value proposer was selected, and the former law
is continued in effect for that purpose.
SECTION 5. This Act takes effect September 1, 2013.