TITLE 43. TRANSPORTATION

PART 1. TEXAS DEPARTMENT OF TRANSPORTATION

CHAPTER 2. ENVIRONMENTAL REVIEW OF TRANSPORTATION PROJECTS

The Texas Department of Transportation (department) proposes amendments to §§2.201 - 2.206 and the repeal of §2.207, concerning Memorandum of Understanding with the Texas Parks and Wildlife Department (TPWD).

EXPLANATION OF PROPOSED AMENDMENTS AND REPEAL

Transportation Code, §201.607, requires the department to adopt a memorandum of understanding (MOU) with each state agency that has responsibilities for the protection of the natural environment or for the preservation of historic or archeological resources. Transportation Code, §201.607, also requires the department to adopt the MOU and all revisions to it by rule and to periodically evaluate and revise the MOU. The department has evaluated its MOU with the Texas Parks and Wildlife Department (TPWD) adopted in 2021, and finds it necessary to make various changes to Chapter 2, Subchapter G, of the department's rules.

Amendments to §2.201, Purpose, update the references to the preceding MOU.

Amendments to §2.202, Definitions, delete the definition of "qualified biologist" because it is unnecessary and delete the definition of "riparian habitat" because it is not used in the revised rules. They also add a definition of "species of greatest conservation need (SGCN)." They also clarify that the TPWD Transportation Staff is assigned to work on TxDOT transportation projects specifically, and not transportation projects generally.

Amendments to §2.203, Applicability, revise the triggers for when the department must provide TPWD with an opportunity to review a reevaluation of a project to be more precise. They also specify that for a reevaluation the department need only discuss the project with TPWD instead of formally re-coordinating the project in writing.

Amendments to §2.204, Coordination and Communication, specify that written communication between the department and TPWD, in addition to electronic communication, will be used to the maximum extent practical. This is in recognition of TPWD's practice of providing comments in a letter format and not exclusively in an email format.

Amendments to §2.205, Commitments, relate to the interagency contract by which TxDOT provides funding for one TPWD transportation staff to review TxDOT projects. The amendments specify that TxDOT and TPWD may renew that interagency contract at the same time that the overall MOU in this Subchapter G is renewed, rather than biennially. They also clarify that the TPWD employee funded by TxDOT through the interagency contract is "transportation staff," which is a defined term in §2.202. They also remove a reference to an "associated workplan" in the context of mutually agreeable conservation actions as that term is not actually used by TxDOT and TPWD.

Amendments to §2.206, Interagency Team, add a provision requiring the TxDOT/TPWD interagency team to collaborate on identifying opportunities to enhance wildlife habitat connectivity across Texas to improve terrestrial and aquatic species movements.

Section 2.207, Texas Natural Diversity Database (TXNDD), is repealed because in 2026 the data in the TXNDD will be publicly available and, therefore, the MOU provisions detailing how TxDOT accesses data from the TXNDD will no longer be needed.

FISCAL NOTE

Stephen Stewart, Chief Financial Officer, has determined, in accordance with Government Code, §2001.024(a)(4), that for each of the first five years in which the proposed rules are in effect, there will be no fiscal implications for state or local governments as a result of the department's or commission's enforcing or administering the proposed rules.

LOCAL EMPLOYMENT IMPACT STATEMENT

Doug Booher, Director, Environmental Division has determined that there will be no significant impact on local economies or overall employment as a result of enforcing or administering the proposed rules and therefore, a local employment impact statement is not required under Government Code, §2001.022.

PUBLIC BENEFIT

Doug Booher has determined, as required by Government Code, §2001.024(a)(5), that for each year of the first five years in which the proposed rules are in effect, the public benefit anticipated as a result of enforcing or administering the rules will be continued exchange of information between the department and TPWD regarding transportation projects and their potential impact on natural resources, and better informed decision-making by the department regarding the potential impacts of transportation projects. Additionally, improvements made by the proposed MOU compared to the existing one regarding coordination of reevaluations with TPWD should result in more efficient delivery of some transportation projects.

COSTS ON REGULATED PERSONS

Doug Booher has also determined, as required by Government Code, §2001.024(a)(5), that for each year of that period there are no anticipated economic costs for persons, including a state agency, special district, or local government, required to comply with the proposed rules and therefore, Government Code, §2001.0045, does not apply to this rulemaking.

ECONOMIC IMPACT STATEMENT AND REGULATORY FLEXIBILITY ANALYSIS

There will be no adverse economic effect on small businesses, micro-businesses, or rural communities, as defined by Government Code, §2006.001, and therefore, an economic impact statement and regulatory flexibility analysis are not required under Government Code, §2006.002.

GOVERNMENT GROWTH IMPACT STATEMENT

Doug Booher has considered the requirements of Government Code, §2001.0221 and anticipates that the proposed rules will have no effect on government growth. He expects that during the first five years that the rules would be in effect:

(1) they would not create or eliminate a government program;

(2) their implementation would not require the creation of new employee positions or the elimination of existing employee positions;

(3) their implementation would not require an increase or decrease in future legislative appropriations to the agency;

(4) they would not require an increase or decrease in fees paid to the agency;

(5) they would not create a new regulation;

(6) they would not expand or limit an existing regulation, but would repeal existing §2.207 regarding the TXNDD because in 2026 the data in the TXNDD will be publicly available and, therefore, the MOU provisions detailing how TxDOT accesses data from the TXNDD will no longer be needed;

(7) they would not increase or decrease the number of individuals subject to its applicability; and

(8) they would not positively or adversely affect this state's economy.

TAKINGS IMPACT ASSESSMENT

Doug Booher has determined that a written takings impact assessment is not required under Government Code, §2007.043.

COASTAL MANAGEMENT PROGRAM CONSISTENCY REVIEW

The proposed rules are subject to the Texas Coastal Management Program (CMP) and must be consistent with all applicable CMP policies. The department has concluded that the proposed rules are consistent with all applicable CMP policies.

The CMP policies applicable to transportation projects are set forth at 31 TAC §26.31. This rulemaking does not dictate the siting of transportation projects or contain any other requirements that would contradict any of the CMP policies listed in that rule. Rather, it establishes a mechanism by which the department and TPWD can efficiently and appropriately exchange information regarding transportation projects and their potential impacts on natural resources, as required by statute at Transportation Code, §201.607, that is acceptable to both department and TPWD staff. None of the CMP policies listed at §26.31 pertain to the mechanism by which the department and TPWD exchange information. Additionally, the intent of the MOU is to foster communication, collaboration, and cooperation between TPWD and the department on the review of transportation projects and protection of State natural resources, which is generally in alignment with the overall purpose of the CMP policies listed at 31 TAC §26.31. For these reasons, this rulemaking is consistent with the CMP policies listed at 31 TAC §26.31.

A copy of this rulemaking will be submitted to the General Land Office for its comments on the consistency of the proposed rulemaking with the CMP. The department requests that the public also give comment on whether the proposed rulemaking is consistent with the CMP.

SUBMITTAL OF INFORMATION AND COMMENTS

Any person that is required to comply with the proposed rule or any other interested person may provide information related to the cost, benefit, or effect of the proposed rule, including any applicable data, research, or analysis, or may submit written comments on the amendments to §§2.201 - 2.206 and repeal of §§2.207. The information or comments must be submitted to Rule Comments, General Counsel Division, Texas Department of Transportation, 125 East 11th Street, Austin, Texas 78701-2483 or to RuleComments@txdot.gov with the subject line "TPWD MOU rulemaking." The deadline for receipt of the information or comments is 5:00 p.m. on March 16, 2026. In accordance with Transportation Code, §201.811(a)(5), a person who makes a submission must disclose, in writing with the submission, whether the person does business with the department, may benefit monetarily from the proposed amendments, or is an employee of the department.

SUBCHAPTER G. MEMORANDUM OF UNDERSTANDING WITH THE TEXAS PARKS AND WILDLIFE DEPARTMENT

STATUTORY AUTHORITY

The amendments are proposed under Transportation Code, §201.101, which provides the Texas Transportation Commission (commission) with the authority to establish rules for the conduct of the work of the department, and more specifically, §201.607, requiring the department to have an MOU with TPWD and to adopt it by rulemaking.

CROSS REFERENCE TO STATUTES IMPLEMENTED BY THIS RULEMAKING

Transportation Code, §§201.604, 201.607, and 201.752.

§2.201. Purpose.

(a) Transportation Code §201.607 requires the Texas Department of Transportation (TxDOT) to adopt a memorandum of understanding (MOU) with each state agency that has responsibilities for the protection of the natural environment or for the preservation of historical or archeological resources, and requires TxDOT and each of the agencies to adopt the memoranda and all revisions by rule. This subchapter contains the MOU between TxDOT and the Texas Parks and Wildlife Department (TPWD) that implements that section.

(b) This subchapter furthers TxDOT's environmental policy, as found in §2.2 of this chapter (relating to Environmental Policy), to integrate environmental considerations into department activities to achieve compliance with applicable laws, regulations and standards. TxDOT will focus on delivering safe, efficient transportation projects and making sound decisions based on a balanced consideration of transportation needs and of social, economic, and environmental impacts of proposed transportation improvements.

(c) According to Parks and Wildlife Code §12.0011, TPWD is the state agency with primary responsibility for protecting the state's fish and wildlife resources; providing recommendations that will protect fish and wildlife resources to local, state, and federal agencies that approve, permit, license, or construct developmental projects; providing information on fish and wildlife resources to any local, state, and federal agencies or private organizations that make decisions affecting those resources.

(d) Except as specified in subsection (f) of this section, this MOU supersedes the MOU adopted by TxDOT and TPWD in 2021 [on September 1, 2013 and associated programmatic agreements]. Nothing in this subchapter supersedes, modifies, or nullifies any other agreement entered into by TxDOT and TPWD.

(e) TxDOT and TPWD shall examine and revise this MOU not later than the fifth anniversary of its effective date, as required by Transportation Code, §201.607. Notwithstanding the above, this MOU remains in effect until revised or terminated by written agreement of TxDOT and TPWD.

(f) The effective date of this MOU is the date on which this Subchapter G takes effect. Projects for which coordination with TPWD has been initiated prior to the effective date of this MOU will complete coordination under the procedures of the 2021 [September 2013] MOU. Projects for which coordination with TPWD has not been initiated prior to the effective date of this MOU will be governed by this MOU. A project that requires reevaluation, and subsequently requires coordination as specified in §2.203 of this subchapter (relating to Applicability), will be governed by this MOU.

(g) The intent of the MOU is to foster communication, collaboration, and cooperation between TPWD and TxDOT on the review of transportation projects and protection of State natural resources.

§2.202. Definitions.

The following words and terms, when used in this subchapter, or in documents prepared by TxDOT or TPWD pursuant to this subchapter, have the following meanings.

(1) Best or Beneficial Management Practices (BMPs)--Measures provided by TPWD that will result in avoidance and minimization of potential impacts to natural resources.

(2) Categorical Exclusion (CE)--A category of actions that have been found to have no significant effect on the environment, individually or cumulatively, and are excluded from the requirement to prepare an Environmental Assessment or Environmental Impact Statement as defined in §2.81 of this chapter (relating to Categorical Exclusions).

(3) Environmental Assessment (EA)--Environmental documentation required for a transportation project that TxDOT has not classified as a categorical exclusion and that does not clearly require the preparation of an EIS, or if TxDOT believes that an EA would assist in determining the need for an EIS, as defined in §2.83 of this chapter (relating to Environmental Assessments).

(4) Environmental decision--The official record created after coordination, analysis, and reviews are completed concluding that an action and its environmental impacts have been adequately identified and assessed. A Finding of No Significant Impact (FONSI) is the environmental decision document for an EA and a Record of Decision (ROD) is the environmental decision document for an EIS.

(5) Environmental Impact Statement (EIS)--Environmental documentation required for a transportation project if there are likely to be significant environmental impacts, as defined in §2.84 of this chapter (relating to Environmental Impact Statements).

(6) Interagency Team (IAT)--As defined in §2.206 of this subchapter (relating to Interagency Team), TPWD and TxDOT staff identified to communicate on behalf of TPWD and TxDOT to carry out the MOU.

(7) [(8)] Reevaluation--The review and determination of the validity of the environmental decision under certain circumstances involving changes or delays subsequent to the environmental decision as defined in §2.85 of this chapter (relating to Reevaluations).

(9) [(10)] Texas Natural Diversity Database (TXNDD)--A TPWD-owned and maintained database of natural resource records, including SGCN [species of greatest conservation need (SGCN)] and other tracked species, important remnant native vegetation, and other features of Texas natural history.

(10) [(11)] TPWD--Texas Parks and Wildlife Department.

(11) [(12)] TPWD Transportation Staff--The qualified biologist at TPWD that is assigned to work solely on TxDOT transportation projects and related matters.

(12) [(13)] TxDOT--Texas Department of Transportation.

§2.203. Applicability.

(a) TxDOT will coordinate with TPWD on federal and state transportation projects that require an EA or EIS.

(b) TxDOT may coordinate other projects that do not require an EA or EIS with TPWD at TxDOT's discretion.

(c) If TxDOT prepares a reevaluation for a transportation project that was previously coordinated with TPWD under any previous [the 2013] MOU, TxDOT will discuss the project changes with TPWD Transportation Staff [coordinate the reevaluation with TPWD] when any of the following apply:

(1) New impacts not included in previous coordination or increase in impacts from previous coordination to federal-listed or [terrestrial and aquatic] state-listed species, SGCN, [or their habitat as determined by a qualified biologist] or recorded rare plant communities [with a record] in the TXNDD [or any state rank or rank range that includes a 1, 2, or 3].

(2) New or increased impacts to [riparian habitat or] water resources that trigger a pre-construction notification or other permitting action with the U.S. Army Corps of Engineers.

(3) Change to commitments made during previous coordination, including BMPs.

(d) This subchapter does not apply to individual maintenance projects for which a programmatic environmental review is conducted under §2.133 of this chapter (relating to Maintenance Projects and Programs).

§2.204. Coordination and Communication.

(a) For projects requiring an EA or EIS, TxDOT will contact TPWD when TxDOT has completed its analysis of potential impacts to fish, wildlife, and other natural resources. To facilitate collaborative review, TxDOT will provide TPWD access to TxDOT's Environmental Compliance Oversight System (ECOS).

(b) TxDOT will post the set of BMPs, as recommended by TPWD, on the Environmental Compliance Toolkit webpage [the set of BMPs as recommended by TPWD]. This set of BMPs is non-project specific. The application of specific BMPs to individual projects will be determined by TxDOT at its discretion.

(c) TxDOT will indicate in the draft EA or draft EIS the TPWD-recommended BMPs that will be applied to the project. TxDOT may also include information shared by TPWD during collaborative review.

(d) To ensure TxDOT will benefit from any recommendations or information provided by TPWD early in the environmental review process, TxDOT will follow the procedure indicated below.

(1) At or around the same time that a draft EA or draft EIS is made available for public review, but no less than 45 days before the issuance of an environmental decision, TxDOT will email the notice of availability of the document required by §2.108 of this chapter (relating to Notice of Availability) to TPWD at the following email address: WHAB_TxDOT@tpwd.texas.gov or the email account designated by TPWD.

(2) The email communication described in subsection (1) will serve as the "request for comments" in Parks and Wildlife Code §12.0011(b-1).

(3) To facilitate review of a draft EA or EIS, TxDOT will provide access to TxDOT's ECOS.

(e) If TPWD has any information or recommendations to conserve fish and wildlife species and other natural resources it wishes to provide to TxDOT in response to a request for comments, TPWD will provide them in writing to TxDOT within 45 days of the date on which TxDOT submitted the request for comments by email.

(f) If TPWD provides any recommendations or information regarding fish and wildlife to TxDOT after the 45-day deadline specified in subsection (e) of this section, then TxDOT will consider such recommendations or information to the extent practicable.

(g) TxDOT will respond as outlined in Parks and Wildlife Code §12.0011(c).

(h) Written and electronic [Electronic] communication will be used to the maximum extent practical.

§2.205. Commitments.

(a) TxDOT will provide funding, through an interagency contract, for one TPWD Transportation Staff [employee] to review transportation projects under this agreement. TxDOT will actively and consistently engage this employee in project development, conservation actions, and other natural resource coordination needs as determined appropriate by TxDOT. The interagency contract to fund the review of transportation projects will be renewed with this MOU [biennially] at TxDOT's discretion.

(b) Through that same interagency contract or other authority as appropriate, TxDOT and TPWD will identify and collaborate on mutually agreeable conservation actions. Conservation actions to be undertaken will be described in detail in an interagency contract document [ or associated workplan] agreed upon by the IAT.

§2.206. Interagency Team.

(a) Each agency shall mutually appoint members to IAT which will meet at least on a bi-annual basis.

(b) An Interagency Team shall discuss and make recommendations for opportunities for the agencies to partner on conservation actions including but not limited to research, offsets, specification development, and restoration opportunities. The IAT will collaborate on identifying opportunities to enhance wildlife habitat connectivity across Texas to improve terrestrial and aquatic species movements.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on January 29, 2026.

TRD-202600376

Becky Blewett

Deputy General Counsel

Texas Department of Transportation

Earliest possible date of adoption: March 15, 2026

For further information, please call: (512) 463-8630

STATUTORY AUTHORITY

The repeal is proposed under Transportation Code, §201.101, which provides the Texas Transportation Commission (commission) with the authority to establish rules for the conduct of the work of the department, and more specifically, §201.607, requiring the department to have an MOU with TPWD and to adopt it by rulemaking.

CROSS REFERENCE TO STATUTES IMPLEMENTED BY THIS RULEMAKING

Transportation Code, §§201.604, 201.607, and 201.752.

§2.207. Texas Natural Diversity Database (TXNDD).

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on January 29, 2026.

TRD-202600377

Becky Blewett

Deputy General Counsel

Texas Department of Transportation

Earliest possible date of adoption: March 15, 2026

For further information, please call: (512) 463-8630

CHAPTER 9. CONTRACT AND GRANT MANAGEMENT

SUBCHAPTER B. CONTRACTS FOR HIGHWAY PROJECTS

The Texas Department of Transportation (department) proposes the amendments to §§9.12 - 9.15 and 9.17, relating to Contracts for Highway Projects.

EXPLANATION OF PROPOSED AMENDMENTS

The purpose of this rulemaking is to clarify the rules of the Texas Transportation Commission (commission) concerning qualification of bidders, submittal and acceptance of bids, and award of contracts for highway projects administered by the department.

Amendments to §9.12, Qualification of Bidders, clarify that the "date of the financial statement" for the beginning of the 12-month period of prequalification refers to the "balance sheet date" to eliminate confusion. The amendments also clarify that only independent certified public accountancy firms may provide attest services, in accordance with Texas Occupations Code, §901.451. For bidders qualifying under the Confidential Questionnaire, the rules currently grant a three-month grace period to allow bidders to prepare and submit updated financial information for the coming year's qualification. A longer grace period may be needed when a submittal is dependent on the completion of a parent company's financial information. The amendments extend the grace period to four months for all qualification levels, including qualification under the Confidential Questionnaire.

Amendments to §9.13, Notice of Letting and Issuance of Proposal Forms, standardize references to "the electronic bidding system" for clarity and consistency.

Amendments to §9.14, Submittal of Bid, clarify that, consistent with paper bid bonds, electronic bid bonds must be issued by authorized sureties, include the surety's seal, and be dated on or before the date of bid opening. The amendments also standardize references to "the electronic bidding system" for clarity and consistency.

Amendments to §9.15, Acceptance of Bids, allow a bid to be considered nonresponsive if the department discovers a discrepancy prior to contract award. Before recommending award of a contract, the department verifies information certified by the bidder. Currently, the department may consider a bid nonresponsive if the bidder fails to acknowledge a certification; however, there is no recourse short of rejecting all bids if the department discovers a discrepancy with a certification prior to award of the contract. The amendments allow the department to consider a bid to be nonresponsive in such a situation.

Amendments to §9.17, Award of Contract, authorize the department to delay its notification of contract award pending the resolution of railroad access agreements, third-party financial clearances, or other conditions that are not in the best interest of the state to address the situations in which there are requirements that restrict the department from proceeding immediately with contract execution.

FISCAL NOTE

Stephen Stewart, Chief Financial Officer, has determined, in accordance with Government Code, §2001.024(a)(4), that for each of the first five years in which the proposed rules are in effect, there will be no fiscal implications for state or local governments as a result of the department's or commission's enforcing or administering the proposed rules.

LOCAL EMPLOYMENT IMPACT STATEMENT

Mr. Duane Milligan, P.E., Director, Construction Division, has determined that there will be no significant impact on local economies or overall employment as a result of enforcing or administering the proposed rules and therefore, a local employment impact statement is not required under Government Code, §2001.022.

PUBLIC BENEFIT

Mr. Duane Milligan, P.E., has determined, as required by Government Code, §2001.024(a)(5), that for each year of the first five years in which the proposed rules are in effect, the public benefit anticipated as a result of enforcing or administering the rules will be efficiency in award of contracts for highway projects and improving the clarity and readability of the rules.

COSTS ON REGULATED PERSONS

Mr. Duane Milligan, P.E., has also determined, as required by Government Code, §2001.024(a)(5), that for each year of that period there are no anticipated economic costs for persons, including a state agency, special district, or local government, required to comply with the proposed rules and therefore, Government Code, §2001.0045, does not apply to this rulemaking.

ECONOMIC IMPACT STATEMENT AND REGULATORY FLEXIBILITY ANALYSIS

There will be no adverse economic effect on small business, micro-business, or rural communities, as defined by Government Code, §2006.001, and therefore, an economic impact statement and regulatory flexibility analysis are not required under Government Code, §2006.002.

GOVERNMENT GROWTH IMPACT STATEMENT

Mr. Duane Milligan, P.E., has considered the requirements of Government Code, §2001.0221 and anticipates that the proposed rules will have no effect on government growth. He expects that during the first five years that the rule would be in effect:

(1) it would not create or eliminate a government program;

(2) its implementation would not require the creation of new employee positions or the elimination of existing employee positions;

(3) its implementation would not require an increase or decrease in future legislative appropriations to the agency;

(4) it would not require an increase or decrease in fees paid to the agency;

(5) it would not create a new regulation;

(6) it would not expand, limit, or repeal an existing regulation;

(7) it would not increase or decrease the number of individuals subject to its applicability; and

(8) it would not positively or adversely affect this state's economy.

TAKINGS IMPACT ASSESSMENT

Mr. Duane Milligan, P.E., has determined that a written takings impact assessment is not required under Government Code, §2007.043.

SUBMITTAL OF COMMENTS

Any person that is required to comply with the proposed rule or any other interested person may provide information related to the cost, benefit, or effect of the proposed rule, including any applicable data, research, or analysis, or may submit written comments on the amendments to §§9.12-9.15 and §9.17, to Rule Comments, General Counsel Division, Texas Department of Transportation, 125 East 11th Street, Austin, Texas 78701-2483 or to RuleComments@txdot.gov with the subject line "Contracts for Highway Projects." The deadline for receipt of comments is 5:00 p.m. on March 16, 2026. In accordance with Transportation Code, §201.811(a)(5), a person who submits comments must disclose, in writing with the comments, whether the person does business with the department, may benefit monetarily from the proposed amendments, or is an employee of the department.

STATUTORY AUTHORITY

The amendments are proposed under Transportation Code, §201.101, which provides the Texas Transportation Commission (commission) with the authority to establish rules for the conduct of the work of the department, and more specifically, Transportation Code, §223.004, which authorizes the commission to adopt rules to prescribe conditions under which a bid may be rejected by the department and Transportation Code, §223.014, which requires the commission to adopt rules relating to a bid guaranty.

CROSS REFERENCE TO STATUTES IMPLEMENTED BY THIS RULEMAKING

Transportation Code, Chapter 223, Subchapter A.

§9.12. Qualification of Bidders.

(a) Eligibility. To be eligible to bid on a highway improvement contract, other than a building contract, or on a materials contract, potential bidders must satisfy the applicable requirements listed in this section.

(1) If the department has accepted from a person a properly completed Confidential Questionnaire, as described in subsection (c) of this section, and audited financial information, as described in subsection (b)(1) of this section, the person is eligible to bid on any project for which the person meets any necessary special technical qualification requirements, has sufficient available bidding capacity, as determined under subsection (e) of this section, and has submitted a properly completed Certification of Eligibility Status form if it is a federal-aid project.

(2) A person that has submitted only a Bidder's Questionnaire, as described in subsection (d) of this section, may bid only on a specified project for which the department has waived the requirements of paragraph (1) of this subsection. Such a project is referred to as a waived project and generally has one of the following characteristics:

(A) the engineer's estimate for the project is less than $1 million;

(B) the project is a maintenance project;

(C) the project is an emergency project;

(D) the project contains specialty items not normal to the department's roadway projects program; or

(E) the project is for the purchase of goods that may be purchased under a materials contract.

(3) A bidder that submits only a Materials Supplier's Questionnaire is eligible to bid only on a materials contract, including a materials contract awarded under §9.19 of this subchapter (relating to Emergency Contract Procedures).

(b) Financial Information. This section refers to three types of financial information.

(1) Audited financial information is information resulting from an examination of the accounting system, records, and financial statements by an independent certified public accountancy firm [accountant] in accordance with generally accepted auditing standards. Based on the examination, the auditor expresses an opinion concerning the fairness of the financial information in conformity with generally accepted accounting principles. A bidder that submits audited financial information, as required for a Confidential Questionnaire in accordance with subsection (c) of this section, is eligible to bid on all projects for which the bidder has available bidding capacity, as determined under subsection (e) of this section.

(2) Reviewed financial information may be used in a Bidder's Questionnaire under subsection (d) of this section. The scope of reviewed financial information is substantially less than audited financial information, and the information is the result primarily of inquiries of company personnel and analytical procedures applied to financial data by an independent certified public accountancy firm [accountant]. Only negative assurance is expressed by the independent certified public accountancy firm [accountant], which means that the firm [independent accountant] is not aware of any material modifications that should be made in order for the financial information to conform to generally accepted accounting principles. A bidder that submits reviewed financial information is subject to the limitations described in subsections (d) and (e) of this section for a waived project.

(3) Compiled financial information also may be used in a Bidder's Questionnaire under subsection (d) of this section. Compiled financial information only presents information that is the representation of management. No opinion or other assurance is expressed by the independent certified public accountancy firm [accountant]. A bidder that submits compiled financial information is subject to the limitations described in subsections (d) and (e) of this section for a waived project.

(c) Confidential Questionnaire. A potential bidder must satisfy the requirements of this subsection to be eligible to bid on a highway improvement contract, except as provided by subsection (d) of this section.

(1) A potential bidder must:

(A) submit to the department's Construction Division in Austin 10 days prior to the last day of bid opening a Confidential Questionnaire that includes information, as required by the department, concerning the bidder's equipment and experience as well as financial condition;

(B) have a certified public accountancy [accountant] firm that is licensed to practice public accountancy prepare the audited and any other financial information required by the department;

(C) satisfactorily comply with any technical qualification requirements determined by the department to be necessary for a specific project; and

(D) properly complete the Certification of Eligibility Status form contained in the Confidential Questionnaire for the purpose of bidding on federal-aid projects.

(2) Information adverse to the potential bidder contained in the Certification of Eligibility Status form will be reviewed by the department and the Federal Highway Administration, and may result in the bidder being declared ineligible to submit bids.

(3) Satisfactory audited financial information will grant a 12-month period of qualification from the balance sheet date of the financial statement.

(4) A four-month [three month] grace period of qualification, for the purpose of preparing and submitting current audited information, will be granted prior to the expiration date of the financial statement.

(5) The department may require current audited information at any time if circumstances develop which are factors that could alter the potential bidder's financial condition, ownership structure, affiliation status, or ability to operate as an on-going concern.

(d) Bidder's Questionnaire; Materials Supplier's Questionnaire. To be eligible to bid on a contract under this subsection or on a contract to be awarded under §9.19 of this subchapter (relating to Emergency Contract Procedures), a bidder must:

(1) submit to the department's headquarters office in Austin 10 days prior to the date the bid opens, a Bidder's Questionnaire that includes information, as required by the department, concerning a bidder's equipment and experience or for a materials contract, a bidder may submit a Materials Supplier's Questionnaire instead of a Bidder's Questionnaire;

(2) submit unaudited and other data as required in the instructions to the questionnaire submitted under paragraph (1) of this subsection;

(3) satisfactorily comply with any technical qualification requirements determined by the department to be necessary on a specific project; and

(4) for a federal-aid project, properly complete the Certification of Eligibility Status form contained in the questionnaire submitted under paragraph (1) of this subsection. Information adverse to the potential bidder contained in the certification will be reviewed by the department and by the Federal Highway Administration, and may result in the bidder being declared ineligible to submit bids on a federal-aid project.

(e) Bidding capacity; available bidding capacity. The department will make its examination and determination based on the information submitted under subsection (c) or (d) of this section, as appropriate, and advise the bidder of its bidding capacity.

(1) For a bidder submitting a Confidential Questionnaire and audited financial information, the amount of the bidding capacity will be determined by multiplying the net working capital by a factor determined by the department based on the expected dollar volume of projects to be awarded and the number of bidders prequalified by the department. If this calculation results in a positive amount that is not greater than $2 million, the bidder will receive a bidding capacity of $2 million if the bidder has positive net working capital and the bidder provides documentation of at least two years' experience and four completed projects in the field in which the bidder wishes to bid. Bidding capacity determined under this paragraph applies for any project and is not limited to waived projects.

(2) For a bidder submitting a Bidder's Questionnaire with no prior experience in construction or maintenance, or a negative working capital position (i.e., financial statements indicate that current liabilities exceed current assets), will receive a bidding capacity of $1 million for waived projects only.

(3) For a bidder submitting a Bidder's Questionnaire and compiled financial information if the principals of the bidder have at least one year experience in construction or maintenance and have satisfactorily completed at least two projects in these fields, the bidding capacity is $1.5 million for waived projects only.

(4) For a bidder submitting a Bidder's Questionnaire and compiled financial information and the principals of which have at least two years' experience in construction or maintenance and have satisfactorily completed at least four projects in these fields, the bidding capacity is $2 million for waived projects only. Those bidders possessing more than two years' experience will be granted an additional $500,000 in bidding capacity for each additional year of experience in construction or maintenance, with a maximum bidding capacity of $6 million for waived projects only.

(5) For a bidder submitting a Bidder's Questionnaire and reviewed financial information and the principals of which have at least three years of experience in construction or maintenance and have satisfactorily completed at least six projects in these fields, the amount of the bidding capacity will be determined by multiplying the net working capital by a factor determined by the department based upon the expected dollar volume of projects to be awarded and the number of bidders prequalified by the department. In the event that this calculation does not result in an amount greater than $2 million, the bidder will receive a bidding capacity of $2 million. Bidding capacity determined under this paragraph is limited to waived projects only.

(6) A bidder's available bidding capacity is determined by the department by subtracting from the bidder's bidding capacity the amount of the estimated cost of the bidder's uncompleted work on department contracts. Bidding capacity does not apply to a materials contract or building contract and an uncompleted materials or building contract does not affect the bidding capacity or available bidding capacity of a bidder.

(f) Effect of contract performance. A person's bidding capacity or eligibility to bid on a highway improvement contract may be affected by a decision of the deputy executive director under §9.24 of this chapter (relating to Performance Review Committee and Actions).

(g) Affiliated bidders; independence exception. Bidders that the department determines in accordance with §9.27 of this subchapter (relating to Affiliated Entities) are affiliated are not eligible to submit bids for the same project. A bidder that is determined to be affiliated but that can establish independence from the other affiliated bidders may request, in accordance with this subsection, an exception to its ineligibility. Such a request may be made only once during any 12-month period.

(1) To request the exception to the department's finding of affiliation, a bidder must submit to the executive director a written request explaining the basis for the exception accompanied by supporting evidence, including an affidavit affirming that the bidder is independent from and not coordinating with the affiliates or any other bidder. The written request must be received not later than the 30th day before the date of the bid opening for which the exception is requested.

(2) The department will review the request and supporting evidence provided to determine whether the requester is independent from the other affiliated bidder. In determining independence, the department will consider, in addition to other affiliation criteria:

(A) transactions between the potential bidders; and

(B) the extent to which the potential bidders share:

(i) equipment;

(ii) personnel;

(iii) office space; and

(iv) finances.

(3) If the department finds that the bidders are independent, the director of the division reviewing the request will recommend to the executive director that the requesting bidder be granted an exception.

(4) The executive director will review the request, supporting evidence, and department's recommendation and will make the final determination on the request. The executive director will send to the bidder the final written determination. An exception granted to the bidder remains in effect for future bid openings unless the exception is revoked under paragraph (5) of this subsection.

(5) The granting of an exception under this subsection does not remove the classification of the bidders as affiliated. The department reserves the right to conduct follow-up reviews and revoke the exception if the follow-up reviews indicate that the bidders are no longer independent. A bidder's failure to act independently of its affiliates or other bidder during the period it was granted an exception under this subsection may result in the imposition of sanctions.

(6) If bidders classified as affiliates submit bids on the same project, the department reserves the right to reject all bids on that project and relet the contract.

(7) Affiliated bidders that are granted an exception under this subsection and that have been sanctioned in accordance with Chapter 10 of this title must meet the exception criteria in that chapter to be eligible to bid.

(h) Building contracts. To be eligible to bid on a building contract, a potential bidder must comply only with any requirements contained in the governing specifications applicable to the project.

§9.13. Notice of Letting and Issuance of Proposal Forms.

(a) Notice to Contractors. A person may apply to have his or her name placed on a list to receive the Notice to Contractors electronically.

(b) Application for notice. The following entities will receive the Notice to Contractors:

(1) qualified bidders approved under §9.12 of this subchapter (relating to Qualification of Bidders);

(2) disadvantaged business enterprises and historically underutilized businesses; and

(3) organizations performing work under supportive service contracts awarded by the commission.

(c) Notice of Bids. The department will advertise contracts on the Electronic State Business Daily maintained and operated by the Comptroller of Public Accounts.

(d) Proposal form.

(1) Proposal form content. A proposal form may include:

(A) the location and description of the proposed work;

(B) an approximate estimate of the various quantities and kinds of work to be performed or materials to be furnished;

(C) a schedule of items for which unit prices are requested;

(D) the time within which the work is to be completed; and

(E) the special provisions and special specifications.

(2) Form of request. A request for a proposal form on any contract under this subchapter should be made using the department's electronic bidding system. On the written or emailed request of a contractor, the department may enter a form request into the system on behalf of the contractor if the requester is identified as the person authorized to sign for the contractor.

(e) Issuance of proposal form.

(1) This paragraph applies for contracts under this subchapter other than building contracts.

(A) Issuance. Except as provided in subparagraph (B) or (C) of this paragraph or paragraph (3) of this subsection, the department will, upon receipt of a request, issue a proposal form for a contract only to a bidder who qualifies under §9.12(c) or (d) of this subchapter, as appropriate, and for a highway improvement project, only if the estimated cost of the project is within that bidder's available bidding capacity, as determined under §9.12(e) of this subchapter.

(B) Non-issuance. Except as provided in subparagraph (D) of this paragraph, the department will not issue a proposal form requested by a bidder for a contract if at the time of the request the bidder:

(i) is suspended or debarred by order of the commission or by the department;

(ii) has not fulfilled the requirements for qualification under §9.12 of this subchapter;

(iii) does not have the available bidding capacity;

(iv) is ineligible to bid on any proposed contract under Item 7, Article 15, Responsibility for Damage Claims of the department's Standard Specifications for Construction and Maintenance of Highways, Streets, and Bridges;

(v) is prohibited from participating in the contract because of a decision of the Deputy Executive Director under §9.24 of this chapter (relating to Performance Review Committee and Actions); or

(vi) has not attended a mandatory pre-bid conference.

(C) Non-issuance for rebid. The department will not issue a proposal form requested by a bidder for the rebid of a contract if:

(i) at the time of the request the bidder is prohibited from rebidding the proposal due to a bid error on the original proposal form;

(ii) the bidder failed to enter into a contract on the original award;

(iii) at the time of the request the bidder is in default on the original contract or was terminated on the original contract unless the department terminated the contract in the best interest of the state; or

(iv) the bidder or an affiliate of the bidder was originally determined to be the apparent low bidder on a project but failed to submit a DBE commitment as required by §9.227 of this chapter (relating to Information from Bidders) or failed to meet the requirements of §9.17(j) of this subchapter relating to participation in the Department of Homeland Security (DHS) E-Verify system.

(D) Exceptions. The department may issue a proposal form under a temporary approval to a bidder who would be ineligible under subparagraph (B)(ii) of this paragraph if the bidder has substantially complied with the requirements of §9.12 of this subchapter.

(2) This paragraph applies only for building contracts.

(A) Issuance. Except as provided in subparagraph (B) of this paragraph or paragraph (3) of this subsection, the department will issue, upon request, a proposal form to a bidder that is eligible under §9.12(h) of this subchapter.

(B) Non-issuance. The department will not issue a proposal form requested by a bidder for a building contract if, at the time of the request, the bidder:

(i) is disqualified by an agency of the federal government as a participant in programs and activities involving federal assistance and benefits and the contract is a federal-aid project;

(ii) is suspended or debarred by order of the commission or by the department; or

(iii) is prohibited from bidding that project because of default of the first awarded contract.

(3) All contracts. The department will not issue a proposal form for a contract under this subchapter to a bidder if the bidder or a subsidiary or affiliate of the bidder has received compensation from the department to participate in the preparation of the plans or specifications on which the bid or contract is based.

§9.14. Submittal of Bid.

(a) Acceptable methods. Bids for a contract under this subchapter may be submitted either manually or electronically.

(b) Manually submitted bids. For the purpose of manually submitting a bid, an acceptable proposal form is the form that is printed and given to the bidder by the department or a form printed by the bidder from the electronic bidding system [EBS].

(1) Delivery of Bid. The bidder shall place each completed proposal form in a sealed envelope marked to show its contents. When submitted by mail, this envelope shall be placed in another envelope which shall be sealed and addressed as indicated in the notice. Bids must be received on or before the hour and date set for the receipt and opening of bids and must be in the hands of the department letting official by that time.

(2) Bid content. The bidder shall submit the bid in compliance with the following requirements.

(A) Except as provided in subparagraph (B) of this paragraph and paragraph (3) of this subsection, the blank spaces for each item as required in the proposal form shall be filled in by writing in words in ink.

(B) The bidder shall submit a unit price for each item for which a bid is requested (including a zero if appropriate), except in the case of a regular bid item that has an alternate bid item. In such case, prices must be submitted for the base bid or with the set of items of one or more of the alternates.

(C) The bid shall be executed with ink in the complete and correct name of the bidder making the bid and be signed by the person or persons authorized to bind the bidder.

(D) Except in the case of a regular bid item that has an alternate bid item, unit prices shall be stated in dollars and/or cents for each bid item listed in the proposal form.

(3) Computer printouts.

(A) For manually submitted bids, a bidder may, in lieu of writing in words in ink on the bid item sheet, submit an original computer printout sheet bearing the authorized signature for the bidder. The unit prices shown on acceptable printouts will be the official unit prices used to tabulate the official total bid amount and used in the contract if awarded by the commission.

(B) Computer printouts are not acceptable on building contracts.

(c) Electronically submitted bids. In lieu of submitting a printed proposal form, the bidder may submit the bid electronically using the electronic bidding system [EBS] in accordance with this subsection.

(1) Bids must be received by the electronic vault on or before the time and date set for the receipt and opening of bids.

(2) For the submission or withdrawal of electronic bids, the bidder is responsible for obtaining its use of a computer system and access to the Internet.

(3) The department is not responsible for a bidder being unable to submit or withdraw a bid due to the unavailability of the Internet.

(4) The bid shall be in the correct name of the bidder making the bid.

(d) Bid guaranty. Except as provided in paragraph (4) of this subsection, a bidder must submit a bid guaranty with the bid for a contract that, on the date of the release of its advertisement, has an engineer's estimate of more than $25,000. The amount of the guaranty is equal to two percent of the estimate, rounded to the nearest $1,000, not to exceed $100,000.

(1) Except as provided in paragraph (2) or (4) of this subsection, the bid guaranty must be made payable to the order of the commission or department and in the form of a cashier's check, money order, or teller's check drawn by or on a state or national bank, savings and loan association, or a state or federally chartered credit union (collectively referred to as a "bank"). The check must be payable at or through the institution issuing the instrument, or must be drawn by a bank on a bank, or by a bank and payable at or through a bank. The form of the instrument must be identified on the instrument's face.

(2) A bidder may submit a bid bond, in lieu of providing the guaranty required in paragraph (1) of this subsection. The bid bond shall be on the form specified by the department. A bid bond will only be accepted from a surety company authorized to execute a bond under and in accordance with state law. The bond must be dated on or before the date of the bid opening, bear the impressed seal of the surety company and the name of the bidder, and be signed by the bidder or bidders, in the case of a joint venture, and an authorized representative of the surety company. As an alternative for joint venture bidders, each of the bidders may submit a separate bid bond, completed as outlined in this paragraph. Powers of attorney must be attached to the bid bond. The bid bond amount required by the department must be within the surety company's authorized bonding limit.

(3) The department will not accept as a bid guaranty:

(A) personal checks or certified checks;

(B) other types of money orders; or

(C) checks or money orders more than 90 days old.

(4) For bids submitted electronically under subsection (c) of this section, the bid guaranty must be an electronic bid bond [must be] made in the name or department issued vendor number of the bidder or if more than one, each bidder. An electronic bid bond will be accepted only from a surety company authorized to execute a bond under and in accordance with state law. The bond must be dated on or before the date of bid opening and bear the seal of the surety company. For joint venture bidders, the bond must be made in the names or department issued vendor numbers of all joint venture bidder participants. The bond authorization code must be entered into the authorization code field contained in the electronic bidding system [EBS]. Only bond authorization codes from the companies listed in the most recent version of the electronic bidding system [EBS] are acceptable. Printed checks or bid bond forms are not acceptable as guaranties for electronic bids.

§9.15. Acceptance of Bids.

(a) Public opening. Bids will be opened in accordance with Transportation Code, §223.004 and §223.005.

(1) Bids for contracts other than building contracts, with an estimate of less than $1 million, may be filed with the district engineer at the headquarters for the district and opened and read at a public meeting conducted by the district engineer, or his or her designee, on behalf of the commission.

(2) Bids for a building contract with an estimate of less than $1 million may be filed with the director of the Support Services Division at the headquarters of the division and opened and read at a public meeting conducted by the director of that division, or the director's designee, on behalf of the commission.

(b) Bids not considered.

(1) The department will not consider a bid if:

(A) the bid is submitted by an unqualified bidder;

(B) the bid is in a form other than the official bid form issued to the bidder;

(C) the certification and affirmation are not signed or the department identifies a discrepancy related to a certification in a subsequent review prior to award;

(D) the bid was not in the hands of the letting official at the time and location specified in the advertisement;

(E) the bidder modifies the bid in a manner that alters the conditions or requirements for work as stated in the proposal form;

(F) the bid guaranty, when required, does not comply with §9.14(d) of this subchapter relating to the Submittal of Bid;

(G) the proposal form was signed by a person who was not authorized to bind the bidder or bidders;

(H) the bid does not include a fully completed HUB plan in accordance with §9.356 of this chapter when required;

(I) a typed proposal form does not contain the information in the format shown on the "Example of Bid Prices Submitted by a Computer Printout's in the proposal form;

(J) the bidder was not authorized to be issued a bid form under §9.13(e) of this subchapter relating to Notice of Letting and Issuance of Proposal Forms;

(K) the bid did not otherwise conform with the requirements of §9.14 of this subchapter;

(L) the bidder fails to properly acknowledge receipt of all addenda;

(M) the bid submitted has the incorrect number of bid items;

(N) the bidder does not meet the applicable technical qualification requirements;

(O) the bidder fails to submit a DBE commitment within the period described by §9.17(i) of this subchapter relating to Award of Contract;

(P) the bidder fails to meet the requirements of §9.17(j) of this subchapter relating to participation in the Department of Homeland Security (DHS) E-Verify system;

(Q) the bidder bids more than the maximum or less than the minimum number of allowable working days shown on the plans when working days is a bid item.

(2) If bids are submitted on the same project separately by a joint venture and one or more members of that joint venture, the department will not accept any of the bids submitted by the joint venture and those members for that project.

(3) If bids are submitted on the same project by affiliated bidders as determined under §9.27 of this subchapter (relating to Affiliated Entities) and the executive director has not granted an affiliation exception under §9.12(g) of this subchapter relating to the Qualification of Bidders, the department will not accept any of the bids submitted by the affiliated bidders for that project.

(c) Revision of bid.

(1) For a manually submitted bid, a bidder may change a bid price before it is submitted to the department by changing the price in the printed bid form and initialing the revision in ink;

(2) For a manually submitted bid, a bidder may change a bid price after it is submitted to the department by requesting return of the bid in writing prior to the expiration of the time for receipt of bids, as stated in the advertisement. The request must be made by a person authorized to bind the bidder. The department will not accept a request by telephone but will accept a properly signed facsimile request. The revised bid must be resubmitted prior to the time specified for the close of the receipt of bids.

(3) For an electronically submitted bid, a bidder may change a unit bid price in the electronic bidding system [EBS] and resubmit electronically to the electronic vault until the time specified for the close of the receipt of bids. Each bid submitted will be retained in the electronic vault. The electronic bid with the latest date and time stamp by the vault will be used for bid tabulation purposes.

(d) Withdrawal of bid.

(1) A bidder may withdraw a manually submitted bid by submitting a request in writing to the letting official before the time and date of the bid opening. The request must be made by a person authorized to bind the bidder. The department will not accept telephone requests but will accept a properly signed facsimile request. Except as provided in §9.16(c) of this subchapter relating to Tabulation of Bids and §9.17(d) of this subchapter, a bidder may not withdraw a bid subsequent to the time for the receipt of bids.

(2) A bidder may withdraw an electronically submitted bid by submitting an electronic or written request to withdraw the bid. An electronic withdrawal request must be submitted using the electronic bidding system [EBS]. The request, whether electronic or written, must be submitted by a person who is authorized by the bidder to submit the request and received by the department before the time and date of the bid opening.

(e) Unbalanced bids. The department will examine the unit bid prices of the apparent low bid for reasonable conformance with the department's estimated prices. The department will evaluate an apparent low bid with extreme variations from the department's estimate or where obvious unbalancing of unit prices has occurred. For the purposes of the evaluation the department will presume the same retainage percentage for all bidders. The department may consider an apparent low bid nonresponsive if the evaluation of the unit bid prices reveals that the apparent low bid is mathematically and materially unbalanced.

§9.17. Award of Contract.

(a) The commission may reject any and all bids opened, read, and tabulated under §9.15 and §9.16 of this subchapter (relating to Acceptance of Bids and Tabulation of Bids, respectively). It will reject all bids if:

(1) there is reason to believe collusion may have existed among the bidders;

(2) the lowest bid is higher than the department's estimate and the commission determines that re-advertising the project for bids may result in a significantly lower low bid;

(3) the lowest bid is higher than the department's estimate and the commission determines that the work should be done by department forces; or

(4) the lowest bid is determined to contain a bid error that meets the notification requirements contained in §9.16(e)(1) of this subchapter and satisfies the criteria contained in §9.16(e)(2) of this subchapter.

(b) Except as provided in subsection (c), (d), (e), or (f) of this section, if the commission does not reject all bids, it will award the contract to the lowest bidder.

(c) In accordance with Government Code, Chapter 2252, Subchapter A, the commission will not award a contract to a nonresident bidder unless the nonresident underbids the lowest bid submitted by a responsible resident bidder by an amount that is not less than the greater of:

(1) the amount by which a resident bidder would be required to underbid the nonresident bidder to obtain a comparable contract in the state in which:

(A) the nonresident's principal place of business is located; or

(B) the nonresident is a resident manufacturer; or

(2) the amount by which a resident bidder would be required to underbid the nonresident bidder to obtain a comparable contract in the state in which a majority of the manufacturing related to the contract will be performed.

(d) For a maintenance contract for a building or a segment of the state highway system involving a bid amount of less than $300,000, if the lowest bidder withdraws its bid after bid opening, the executive director may recommend to the commission that the contract be awarded to the second lowest bidder.

(1) For purposes of this subsection, the term "withdrawal" includes written withdrawal of a bid after bid opening, failure to provide the required insurance or bonds, or failure to execute the contract.

(2) The executive director may recommend award of the contract to the second lowest bidder if he or she, in writing, determines that the second lowest bidder is willing to perform the work at the unit bid prices of the lowest bidder; and

(A) the unit bid prices of the lowest bidder are reasonable, and delaying award of the contract may result in significantly higher unit bid prices;

(B) there is a specific need to expedite completion of the project to protect the health or safety of the traveling public; or

(C) delaying award of the contract would jeopardize the structural integrity of the highway system.

(3) The commission may accept the withdrawal of the lowest bid after bid opening if it concurs with the executive director's determinations.

(4) If the commission awards a contract to the second lowest bidder and the department successfully enters into a contract with the second lowest bidder, the department will return the lowest bidder's bid guaranty upon execution of that contract.

(e) If the lowest bidder is not a preferred bidder and the contract will not use federal funds, the department, in accordance with Transportation Code, Chapter 223, Subchapter B, will award the contract to the lowest-bidding preferred bidder if that bidder's bid does not exceed the amount equal to 105 percent of the lowest bid. For purposes of this subsection, "preferred bidder" means a bidder whose principal place of business is in this state or a state that borders this state and that does not give a preference similar to Transportation Code, §223.050.

(f) When additional information is required to make a final decision, the commission may defer the award or rejection of the contract until the next regularly scheduled commission meeting.

(g) Contracts with an engineer's estimate of less than $1 million may be awarded or rejected by the executive director under the same conditions and limitations as provided in subsections (a) - (c) of this section.

(h) The commission may rescind the award of any contract prior to contract execution upon a determination that it is in the best interest of the state. The executive director may rescind the award of a contract awarded under subsection (g) of this section prior to contract execution upon a determination that it is in the best interest of the state. If a contract is rescinded under this subsection, the bid guaranty will be returned to the bidder, but no compensation will be paid to the bidder as a result of the rescission.

(i) For a contract with a DBE goal, all bidders must submit the DBE information required by §9.227 of this chapter (relating to Information from Bidders) within five calendar days after the date that the bids are opened.

(j) Prior to contract award, all low bidders must be participating or provide documentation of participation in the Department of Homeland Security's (DHS) E-Verify system within five calendar days after the date that the bids are opened.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on January 29, 2026.

TRD-202600375

Becky Blewett

Deputy General Counsel

Texas Department of Transportation

Earliest possible date of adoption: March 15, 2026

For further information, please call: (512) 463-8630

CHAPTER 28. OVERSIZE AND OVERWEIGHT VEHICLES AND LOADS

SUBCHAPTER B. HIGHWAY CROSSINGS BY OVERSIZE AND OVERWEIGHT VEHICLES AND LOADS

The Texas Department of Transportation (department) proposes amendments to §28.11, Surety Bond, and §28.12, Preparation of Contract.

EXPLANATION OF PROPOSED AMENDMENTS

During the 89th Legislative Session, the legislature passed Senate Bill 995, which removed the requirement that the surety bond for a contract authorizing an oversize or overweight vehicle to cross a road or highway be approved by the Comptroller of Public Accounts and the Attorney General's Office.

Amendments to §28.11, Surety Bond, remove the requirement that the state treasurer and the attorney general approve the surety bond and provide that the bonds must be approved by the department to align the rule with the statute. Additional changes are made to clarify the requirements of the section; those changes do not change the substance of the section.

Amendments to §28.12, Preparation of Contract, modify subsection (e) by removing the requirement that the surety bond be approved by the attorney general and the comptroller of public accounts to align the rule with the statute and eliminating language that is redundant of that in §28.11.

FISCAL NOTE

Stephen Stewart, Chief Financial Officer, has determined, in accordance with Government Code, §2001.024(a)(4), that for each of the first five years in which the proposed rules are in effect, there will be no fiscal implications for state or local governments as a result of the department's or commission's enforcing or administering the proposed rules.

LOCAL EMPLOYMENT IMPACT STATEMENT

Mr. James Stevenson, P.E., has determined that there will be no significant impact on local economies or overall employment as a result of enforcing or administering the proposed rules and therefore, a local employment impact statement is not required under Government Code, §2001.022.

PUBLIC BENEFIT

Mr. James Stevenson has determined, as required by Government Code, §2001.024(a)(5), that for each year of the first five years in which the proposed rules are in effect, the public benefit anticipated as a result of enforcing or administering the rules will result in an expeditious approval of Highway Crossing Agreements. This benefits legislative requests as well, several existing highway crossing agreements were a result of passed legislation.

COSTS ON REGULATED PERSONS

Mr. James Stevenson has also determined, as required by Government Code, §2001.024(a)(5), that for each year of that period there are no anticipated economic costs for persons, including a state agency, special district, or local government, required to comply with the proposed rules and therefore, Government Code, §2001.0045, does not apply to this rulemaking.

ECONOMIC IMPACT STATEMENT AND REGULATORY FLEXIBILITY ANALYSIS

There will be no adverse economic effect on small businesses, micro-businesses, or rural communities, as defined by Government Code, §2006.001, and therefore, an economic impact statement and regulatory flexibility analysis are not required under Government Code, §2006.002.

GOVERNMENT GROWTH IMPACT STATEMENT

Mr. James Stevenson has considered the requirements of Government Code, §2001.0221 and anticipates that the proposed rules will have no effect on government growth. He expects that during the first five years that the rule would be in effect:

(1) it would not create or eliminate a government program;

(2) its implementation would not require the creation of new employee positions or the elimination of existing employee positions;

(3) its implementation would not require an increase or decrease in future legislative appropriations to the agency;

(4) it would not require an increase or decrease in fees paid to the agency;

(5) it would not create a new regulation;

(6) it would not expand, limit, or repeal an existing regulation;

(7) it would not increase or decrease the number of individuals subject to its applicability; and

(8) it would not positively or adversely affect this state's economy.

TAKINGS IMPACT ASSESSMENT

Mr. James Stevenson has determined that a written takings impact assessment is not required under Government Code, §2007.043.

SUBMITTAL OF INFORMATION AND COMMENTS

Any person that is required to comply with the proposed rule or any other interested person may provide information related to the cost, benefit, or effect of the proposed rule, including any applicable data, research, or analysis, or may submit written comments on the amendments to §28.11 and §28.12(e). The information or comments must be submitted to Rule Comments, General Counsel Division, Texas Department of Transportation, 125 East 11th Street, Austin, Texas 78701-2483 or to RuleComments@txdot.gov with the subject line "Surety Bonds for Overweight/Oversize Vehicles." The deadline for receipt of the information or comments is 5:00 p.m. on March 16, 2026. In accordance with Transportation Code, §201.811(a)(5), a person who makes a submission must disclose, in writing with the submission, whether the person does business with the department, may benefit monetarily from the proposed amendments, or is an employee of the department.

STATUTORY AUTHORITY

The amendments are proposed under Transportation Code, §201.101, which provides the Texas Transportation Commission (commission) with the authority to establish rules for the conduct of the work of the department, and more specifically, Transportation Code, §623.051, which requires the commission to adopt rules relating to the forms and procedures to be used for contracts for crossing roads.

The authority for the proposed amendments is provided by S.B. No. 995, 89th Regular Session, 2025. The primary author and the primary sponsor of that bill are Sen. Robert Nichols and Rep. Dennis Paul, respectively.

CROSS REFERENCE TO STATUTES IMPLEMENTED BY THIS RULEMAKING

Transportation Code, Chapter 623, Subchapter C.

§28.11. Surety Bond.

Before the requester may exercise any right under a contract under this subchapter, the [The] requester shall[, prior to exercising any rights thereunder,] execute with a corporate surety authorized to do business in this state an adequate surety bond in the [such] amount [as may be] determined by the commission to compensate for the cost of maintenance and repairs as provided in §28.12 of this subchapter (relating to Preparation of Contract). The bond must be [herein,] approved by the department and [state treasurer and the attorney general, with a corporate surety authorized to do business in this state,] conditioned on the requester fulfilling the obligations of the contract.

§28.12. Preparation of Contract.

(a) The department will contract with the requester to indemnify the state for the cost of maintenance or repair to that portion of the highway crossed by vehicles which cannot comply with one or more restrictions of Transportation Code, Chapter 621.

(b) The department will, at the expense of the requester, periodically maintain and repair the vehicle crossing in accordance with established departmental regulations, specifications, and engineering standards and practices.

(c) If the proposed vehicle crossing requires initial upgrading or reconstruction to safely and adequately accommodate the vehicles which will be using the highway crossing, the requester will bear the entire cost of such work. Construction plans, specifications, traffic control plans, and any other related work will be provided by the requester at no cost to the state. At the sole option of the department, it may elect to do this work or provide for this work by separate contract, with the requester bearing the entire cost.

(d) The requester will be responsible for furnishing, installing, maintaining, and removing when no longer required all traffic control devices which are required at the crossing to insure the safety of the traveling public. At the sole option of the department, it may elect to do this work or provide for this work by separate contract, with the requester bearing the entire cost. All traffic-control devices and flaggers, if required, shall be in accordance with the Texas Manual on Uniform Traffic Control Devices.

(e) The requester shall indemnify the department for the cost of maintenance and repair to the vehicle crossing. The requester shall, at the entire expense of the requester, provide and keep in force a surety bond that satisfies the requirements of §28.11 of this subchapter (relating to Surety Bond) [in an amount determined by the state to cover the cost of such maintenance and repair]. [The bond will require approval by the attorney general and comptroller of public accounts.]

(f) The requester shall keep the roadway free of debris and objectionable dust, lights, or noise.

(g) The requester shall provide the department with the department's certificate of insurance covering the latest insurance requirements for contractors doing state highway construction work.

(h) The responsibilities of the requester as set forth in the contract shall not be transferred, assigned, or conveyed to a third party without approval of the department.

(i) If, in the sole judgment of the department, it is determined at a future date that traffic conditions have so changed that the existence or use of the vehicle crossing is impeding maintenance, damaging the highway facility, impairing safety, or that the vehicle crossing is not being properly operated, or that it constitutes a nuisance, or if for any other reason it is in the department's judgment that such a facility is not in the public interest, the vehicle crossing shall be modified if corrective measures acceptable to both the department and the requester can be applied to eliminate the objectionable features of the facility or terminated and the use of the area as a vehicle crossing discontinued.

(j) Upon termination of the contract the department shall make an inspection of the crossing site. If additional repairs, modifications, or rehabilitation is required to return the highway to its original condition, the requester shall bear the entire expense of such work.

The agency certifies that legal counsel has reviewed the proposal and found it to be within the state agency's legal authority to adopt.

Filed with the Office of the Secretary of State on January 29, 2026.

TRD-202600374

Becky Blewett

Deputy General Counsel

Texas Department of Transportation

Earliest possible date of adoption: March 15, 2026

For further information, please call: (512) 463-8630