| 2 | 7 | | |
|---|
| 3 | 8 | | |
|---|
| 4 | 9 | | A BILL TO BE ENTITLED |
|---|
| 5 | 10 | | AN ACT |
|---|
| 6 | 11 | | relating to performance bonds for certain public improvements in |
|---|
| 7 | 12 | | certain municipalities. |
|---|
| 8 | 13 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
|---|
| 9 | 14 | | SECTION 1. Section 212.073, Local Government Code, is |
|---|
| 10 | 15 | | amended to read as follows: |
|---|
| 11 | 16 | | Sec. 212.073. PERFORMANCE BOND; LETTER OF CREDIT. |
|---|
| 12 | 17 | | (a) Except as provided by Subsection (b), the [The] developer must |
|---|
| 13 | 18 | | execute a performance bond for the construction of the improvements |
|---|
| 14 | 19 | | that are the subject of the contract under Section 212.071 to ensure |
|---|
| 15 | 20 | | completion of the project. The bond must be executed by a corporate |
|---|
| 16 | 21 | | surety in accordance with Chapter 2253, Government Code. The |
|---|
| 17 | 22 | | amount of the bond must be for the contract price for the |
|---|
| 18 | 23 | | improvements. The municipality may not require the developer to |
|---|
| 19 | 24 | | include in the amount of the bond any other improvement related to |
|---|
| 20 | 25 | | the development that the developer did not contract with the |
|---|
| 21 | 26 | | municipality to construct under Section 212.071. |
|---|
| 22 | 27 | | (b) The municipality and developer may agree that, instead |
|---|
| 23 | 28 | | of a performance bond under Subsection (a), the developer may |
|---|
| 24 | 29 | | submit to the municipality an irrevocable letter of credit in the |
|---|
| 25 | 30 | | amount required under Subsection (a) for the bond. As part of the |
|---|
| 26 | 31 | | agreement, the municipality may not pay any amount to the |
|---|
| 27 | 32 | | developer, issue a building permit related to the development other |
|---|
| 28 | 33 | | than a permit necessary for the improvements that are the subject of |
|---|
| 29 | 34 | | the contract, or approve a subdivision plat for the developer |
|---|
| 30 | 35 | | until: |
|---|
| 31 | 36 | | (1) the improvements are: |
|---|
| 32 | 37 | | (A) complete; or |
|---|
| 33 | 38 | | (B) in the final phase of construction if the |
|---|
| 34 | 39 | | improvements are constructed in phases; and |
|---|
| 35 | 40 | | (2) the developer has submitted to the municipality an |
|---|
| 36 | 41 | | affidavit stating that the developer has paid all costs associated |
|---|
| 37 | 42 | | with the construction. |
|---|
| 38 | 43 | | SECTION 2. Section 212.073, Local Government Code, as |
|---|
| 39 | 44 | | amended by this Act, applies only to a contract entered into under |
|---|
| 40 | 45 | | Section 212.071, Local Government Code, on or after the effective |
|---|
| 41 | 46 | | date of this Act. A contract entered into under Section 212.071, |
|---|
| 42 | 47 | | Local Government Code, before the effective date of this Act is |
|---|
| 43 | 48 | | governed by the law applicable to the contract immediately before |
|---|
| 44 | 49 | | the effective date of this Act, and that law is continued in effect |
|---|
| 45 | 50 | | for that purpose. |
|---|
| 46 | 51 | | SECTION 3. This Act takes effect September 1, 2017. |
|---|