HBA-MPA H.B. 2643 76(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 2643
By: Longoria
Transportation
4/23/1999
Introduced



BACKGROUND AND PURPOSE 

Currently, small contractors who are historically underutilized businesses
(HUB) often do not have access to large capital resources and are therefore
at a disadvantage in bidding for state contracts under current requirements
that the HUB remit what is often a large percentage of their working
capital for a proposal guaranty in the form of a cashier's check or money
order for each separate highway improvement bid.  H.B. 2643 entitles a
historically underutilized business that is certified as such by the
General Services Commission to waive the requirement for a proposal
guaranty in the form of a cashier's check, money order, or teller's check
as a condition of bidding for a highway improvement contract.  Instead the
certified HUB would be required to submit a bid bond. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that rulemaking
authority is expressly delegated to the Texas Department of Transportation
in SECTION 1 (Section 223.014, Transportation Code) of this bill. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Subchapter A, Chapter 223, Transportation Code, by
adding Section 223.014, as follows: 

Sec. 223.014.  HISTORICALLY UNDERUTILIZED BUSINESS; FORM OF PROPOSAL
GUARANTY.  (a) Provides that a bidder that is a historically underutilized
business, if the Texas  Department of Transportation requires by rule as a
condition of bidding for a highway improvement contract a proposal guaranty
in the form of a cashier's check, money order, or teller's check drawn by a
specified financial institution, is entitled to receive a waiver of that
requirement, and submit a bid bond issued by a surety authorized to do
business in this state in lieu of an instrument specified by that rule. 

(b) Defines "historically underutilized business."

SECTION 2.  Effective date: January 1, 2000.

SECTION 3.  Emergency clause.