| (a) An applicant with a commitment of financial assistance
from the board shall obtain Executive Administrator approval of contract
documents, including engineering plans and specifications and bid
documents, prior to receiving bids and awarding construction contracts.
The applicant shall submit two copies of contract documents, which
shall be as detailed as would be required for submission to contractors
bidding on the work, and which shall be consistent with the engineering
feasibility information submitted with the application. These contract
documents may be submitted in draft form. For water supply projects
requiring commission review, the applicant shall send an additional
copy to the commission. The contract documents must contain the following:
(1) provisions assuring compliance with the board's
rules and all relevant statutes;
(2) provisions providing for the political subdivision
to retain a minimum of 5.0% of the progress payments otherwise due
to the contractor until the building of the project is substantially
complete and a reduction in the retainage is authorized by the executive
administrator;
(3) a contractor's act of assurance form to be executed
by the contractor which shall warrant compliance by the contractor
with all laws of the State of Texas and all rules and published policies
of the board;
(4) a high-resolution digital, searchable copy of the
plans and specifications; and
(5) any additional conditions that may be requested
by the executive administrator.
(b) Engineering Design Approvals for those Projects
Required to use Iron or Steel Products Produced in the United States.
(1) Except as provided by subsections (c) and (d) of
this section, this section applies to Projects with the board and
resulting bid documents submitted to the board or construction contracts
entered into after September 1, 2017.
(2) In this section, the following terms have the assigned
meanings:
(A) Iron and steel products--Products made primarily
of iron or steel that are permanently incorporated into the public
water system, treatment works, agricultural water conservation Project,
or flood project, including, but not limited to: lined or unlined
pipes and fittings, manhole covers and other municipal castings, hydrants,
tanks, flanges, pipe clamps and restraints, valves, structural steel,
reinforced precast concrete, construction materials.
(B) Manufacturing Process--The application of a process
to alter the form or function of materials or elements of a product
in a manner that adds value and transforms the materials or elements
into a new finished product functionally different from a finished
product produced merely from assembling the materials into a product
or elements into a product.
(C) Mechanical and electrical components, equipment,
systems, and appurtenances--Include, but are not limited to, pumps,
motors, gear reducers, drives (including variable frequency drives),
electric/pneumatic/manual accessories used to operate valves (such
as electric valve actuators), mixers, gates, motorized screens (such
as traveling screens), blowers/aeration equipment, compressors, meters,
sensors, controls and switches, supervisory control and data acquisition
(SCADA), membrane bioreactor systems, membrane filtration systems,
filters, clarifiers and clarifier mechanisms, rakes, grinders, disinfection
systems, presses (including belt presses), conveyors, cranes, HVAC
(excluding ductwork), water heaters, heat exchangers, generators,
cabinetry and housings (such as electrical boxes/enclosures), lighting
fixtures, electrical conduit, emergency life systems, metal office
furniture, shelving, laboratory equipment, analytical instrumentation,
dewatering equipment, electrical supports/covers/shielding, and other
appurtenances related to an electrical system necessary for operation
or concealment. An electrical system includes all equipment, facilities,
and assets owned by an electric utility, as that term is defined in §31.002
Utilities Code.
(D) Political subdivision--Includes a county, municipality,
municipal utility district, water control and improvement district,
special utility district, and other types of water districts, including
those created under Texas Constitution Article III, Section 52 or
Article XVI, Section 59, and nonprofit water supply corporations created
and operating under Texas Water Code, Chapter 67.
(E) Produced in the United States--With respect to
iron or steel products, a product for which all manufacturing processes,
from initial melting through application of coatings, occur in the
United States, other than metallurgical processes to refine steel
additives.
(F) Project--A contract between the board and a person
or political subdivision.
(3) Political subdivisions and persons with Projects
funded with financial assistance from the board shall obtain Executive
Administrator approval of contract documents, including engineering
plans and specifications and bid documents, prior to receiving bids
and awarding construction contracts. Except as provided by subsections
(c) and (d) of this section, contract documents and bid documents
provided to all bidders must include language requiring that any iron
or steel products produced through a manufacturing process used in
the Project, be produced in the United States, specifically where
funds will be used to:
(A) construct, remodel, or alter buildings, structures,
or infrastructure; or
(B) supply a material for a project between the board
and a person or a political subdivision; or
(C) finance, refinance, or provide money from funds
administered by the board for a project.
(c) Exemptions from subsection (b) of this section.
(1) Section 363.41(b)(3) does not apply if the board
or Executive Administrator has made a determination that:
(A) iron or steel products, produced in the United
States, to be used in the Project are not:
(i) produced in sufficient quantities; or
(ii) reasonably available at the time contract documents
and bid documents are executed with contractors or subcontractors;
or
(iii) of a satisfactory quality to be used in the Project;
or
(B) the use of iron or steel products produced in the
United States will increase the total cost of the Project by more
than 20 percent; or
(C) complying with the use of iron or steel products
as required by this section is inconsistent with the public interest.
(2) The following components are exempt from complying
with §363.41(b)(3) as they are not iron or steel products:
(A) mechanical and electrical components, equipment,
systems, and appurtenances; and
(B) iron or steel products that are not permanently
incorporated into a Project.
(d) Section 363.41(b) does not apply where the board
has adopted a resolution approving an application for financial assistance
before May 1, 2019, for any portion of financing as described by §§15.432
or 15.472, Water Code.
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