Bill Text: TX HB2032 | 2011-2012 | 82nd Legislature | Engrossed

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

Spectrum: Partisan Bill (Republican 2-0)

Status: (Engrossed - Dead) 2011-05-18 - Left pending in committee [HB2032 Detail]

Download: Texas-2011-HB2032-Engrossed.html

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82R22309 JTS-F
By: Darby H.B. No. 2032

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 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) security [payment bond] beneficiaries who
have a direct contractual relationship with the private entity or a
subcontractor of the private entity to supply labor or material.
(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 amount 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 may [shall] set
the amount of the [bonds or the alternative forms of] security at or
above $250 million, as determined by the department to be in the
best interest of this state.
(d) The [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 design or planning services, the
performance of preliminary studies, or the acquisition of real
property.
(e) The amount of the payment security must not be less than
the amount of the performance security.
(f) In addition to or instead of a performance and payment
bond, 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 United
States domiciled bank acceptable to the department [; 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.]
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 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) security [payment bond] beneficiaries who
have a direct contractual relationship with the private entity or a
subcontractor of the private entity to supply labor or material.
(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 amount 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 may [shall] set
the amount of the [bonds or the alternative forms of] security at or
above $250 million, as determined by the authority to be in the
authority's best interest.
(d) The [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 design or planning services, the
performance of preliminary studies, or the acquisition of real
property.
(e) The amount of the payment security must not be less than
the amount of the performance security.
(f) In addition to, or instead of, performance and payment
bonds, 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 United
States domiciled bank acceptable to the authority [; 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.]
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 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) security [payment bond] beneficiaries who
have a direct contractual relationship with the private entity or a
subcontractor of the private entity to supply labor or material.
(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 amount 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 may [shall] set
the amount of the [bonds or the alternative forms of] security at or
above $250 million, as determined by the authority to be in the
authority's best interest.
(d) The [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 design or planning services, the
performance of preliminary studies, or the acquisition of real
property.
(e) The amount of the payment security must not be less than
the amount of the performance security.
(f) In addition to performance and payment bonds, 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 United
States domiciled bank acceptable to the authority [; 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.]
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, 2011.