H.B. No. 2659
relating to bond requirements for privatized maintenance
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 223.042, Transportation Code, as amended
by Chapters 28 and 274, Acts of the 78th Legislature, Regular
Session, 2003, is reenacted and amended to read as follows:
Sec. 223.042. PRIVATIZATION OF MAINTENANCE CONTRACTS. (a)
Of the amount spent in a fiscal year by the department for
maintenance projects, the department shall spend not less than 50
percent through contracts awarded by competitive bids.
(b) Money spent for maintenance projects to which this
section does not apply is [
are] included when computing the amount
of expenditures for maintenance projects in a fiscal year.
(c) The department may award a contract under this section
as a purchase of service under Subtitle D, Title 10, Government
Code, if the department:
(1) estimates that the contract will involve an amount
less than $15,000; and
(2) determines that the competitive bidding procedure
in this chapter is not practical.
(d) The department shall consider all of its direct and
indirect costs in determining the cost of providing the services.
The department shall use the cost accounting procedures and
instructions developed by the State Council on Competitive
Government under Section 2162.102(c)(2), Government Code, in
determining its cost. On request, the State Council on Competitive
Government shall provide technical assistance to the department
about the cost accounting procedures and instructions.
(e) Subsection (a) does not apply unless the department
determines that a function of comparable quality and quantity can
be purchased or performed at a savings by using private sector
(f) The department shall file a report with the Legislative
Budget Board on September 1 of each fiscal year detailing the
contracts awarded by the department under this section during the
previous fiscal year.
(g) The commission shall adopt rules to administer this
(h) In this section, "maintenance project" means any
routine or preventive maintenance activity. The term includes
mowing, concrete removal and replacement, illumination
maintenance, guardrail repair, fence repair, litter pick-up,
herbicide spraying, pothole repair, silt and erosion control or
repair, sign installation, highway overlaying, paint and bead
striping, rest area maintenance, and installation of raised
(i) This section does not apply to the purchase of
materials for maintenance projects.
(j) [ (i)] As an alternative to the requirements of Sections
2253.021(b) and (c) [ Section 2253.021], Government Code, the
department may require that a performance or payment bond [ securing
a contractor's performance] under a contract awarded under this
section for a [ routine] maintenance project [ activity]:
(1) be in an amount equal to the greatest annual
amount to be paid the contractor under the contract and remain in
effect for one year from the day work is resumed after any default
by the contractor; or
(2) be in an amount equal to the amount to be paid the
contractor during the term of the bond and be for a term of two
years, renewable annually in two-year increments.
(k) [ (j)] A claim against a performance or payment bond
issued under this section must be filed against the bond in effect
on the date the basis for the claim arose [ bond posted under
Subsection (i) must:
[ (1) be solely for the protection of the department;
[ (2) be conditioned on the faithful performance of the
maintenance work in accordance with the contract requirements].
SECTION 2. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2005.
President of the Senate Speaker of the House
I certify that H.B. No. 2659 was passed by the House on April
14, 2005, by the following vote: Yeas 140, Nays 0, 2 present, not
Chief Clerk of the House
I certify that H.B. No. 2659 was passed by the Senate on May
19, 2005, by the following vote: Yeas 31, Nays 0.
Secretary of the Senate