HBA-NRS H.B. 1638 77(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 1638 By: Hamric Transportation 3/8/2001 Introduced BACKGROUND AND PURPOSE Currently, the Texas Department of Transportation (TxDOT) is authorized to establish an electronic bidding system to eliminate the need for contractors to manually deliver their bids. However, TxDOT still requires a bidder on a highway improvement contract to submit a bid guaranty, payable by cashier's check, money order, or teller's check. Electronic bidding is intended to reduce errors in the bids, thereby reducing the number of disqualified bids and increasing the bids that TxDOT is able to consider. House Bill 1638 provides TxDOT with various alternative methods by which to accept and use a bid guaranty for a state highway improvement contract. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that rulemaking authority is expressly delegated to the Texas Transportation Commission in SECTION 1 (Section 223.014, Transportation Code) of this bill. ANALYSIS House Bill 1638 amends the Transportation Code to require the Texas Transportation Commission (commission) by rule to provide a method by which a bidder may submit a bid guaranty. The bill authorizes a rule to authorize the use of an electronic funds transfer, a check, a money order, an escrow account, a trust account, a credit card, or another suitable method as determined by the commission. The bill authorizes the Texas Department of Transportation (TxDOT) to require the payment of a discount or service charge for the use of a credit card. The bill prohibits the commission's rules from prohibiting a bidder from submitting a bid guaranty by use of a cashier's check, money order, or teller's check. The bill authorizes TxDOT to establish one or more escrow accounts in the state highway fund for the prepayment of bid guaranties. The bill requires the bid guaranties, and any fees TxDOT establishes to administer bid guaranties for a state highway improvement contract, to be administered in accordance with an agreement approved by TxDOT. The bill requires any available accumulated interest and other income earned on money in an escrow account to be paid to the bidder or credited to the escrow account. The bill requires TxDOT to deposit each administrative fee and discount and service charge collected to the credit of the state highway fund. The bill authorizes TxDOT to authorize the use of a trust account for the purpose of providing a required bid guaranty and requires the bid guaranty to be deposited in accordance with a trust agreement with a state or nationally chartered financial institution. The bill sets forth requirements to govern the deposit and investment of a bid guaranty in a trust account. EFFECTIVE DATE On passage, or if the Act does not receive the necessary vote, the Act takes effect September 1, 2001.