88R3876 YDB-F
By: Bell of Kaufman H.B. No. 2518
A BILL TO BE ENTITLED
AN ACT
relating to public work contracts, including contracts on public
property leased to a nongovernmental entity.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Sections 2253.001(3) and (4), Government Code,
are amended to read as follows:
(3) "Prime contractor" means a person, firm, or
corporation that makes a public work contract with:
(A) a governmental entity; or
(B) a person who leases any public property.
(4) "Public work contract" means a contract for
constructing, altering, or repairing a public building or carrying
out or completing any public work, including work performed on
property owned by a governmental entity or on public property
leased by the governmental entity to a nongovernmental entity.
SECTION 2. Section 2253.002, Government Code, is amended to
read as follows:
Sec. 2253.002. EXEMPTION. This chapter does not apply to a
public work contract entered into by:
(1) a state agency relating to an action taken under
Subchapter F or I, Chapter 361, Health and Safety Code, or
Subchapter I, Chapter 26, Water Code; or
(2) a nongovernmental entity to lease public property
from a river authority created under Section 59, Article XVI, Texas
Constitution, that owns electric generation capacity in excess of
1,000 megawatts.
SECTION 3. Section 2253.021(a), Government Code, is amended
to read as follows:
(a) A governmental entity that enters into [makes] a public
work contract with a prime contractor or authorizes a
nongovernmental entity leasing public property from the
governmental entity to enter into a public works contract with a
prime contractor shall require the contractor, at least 10 days
before beginning the work, to execute to the governmental entity:
(1) a performance bond if the contract is in excess of
$100,000; and
(2) a payment bond if:
(A) the contract is in excess of $25,000, and the
governmental entity is not a municipality or a joint board created
under Subchapter D, Chapter 22, Transportation Code; or
(B) the contract is in excess of $50,000, and the
governmental entity is a municipality or a joint board created
under Subchapter D, Chapter 22, Transportation Code.
SECTION 4. Sections 2253.024(a) and (b), Government Code,
are amended to read as follows:
(a) A prime contractor, on the written request of a person
who provides public work labor or material and when required by
Subsection (c), shall provide to the person:
(1) the name and last known address of the
governmental entity or nongovernmental leasehold tenant with whom
the prime contractor contracted for the public work;
(2) a copy of the payment and performance bonds for the
public work, including bonds furnished by or to the prime
contractor; and
(3) the name of the surety issuing the payment bond and
the performance bond and the toll-free telephone number maintained
by the Texas Department of Insurance under Subchapter B, Chapter
521, Insurance Code, for obtaining information concerning licensed
insurance companies.
(b) A subcontractor, on the written request of a
governmental entity, a nongovernmental leasehold tenant with whom
the prime contractor contracted, the prime contractor, a surety on
a bond that covers the public work contract, or a person providing
work under the subcontract and when required by Subsection (c),
shall provide to the person requesting the information:
(1) the name and last known address of each person from
whom the subcontractor purchased public work labor or material,
other than public work material from the subcontractor's inventory;
(2) the name and last known address of each person to
whom the subcontractor provided public work labor or material;
(3) a statement of whether the subcontractor furnished
a bond for the benefit of its subcontractors and materialmen;
(4) the name and last known address of the surety on
the bond the subcontractor furnished; and
(5) a copy of that bond.
SECTION 5. Section 2253.027, Government Code, is amended by
adding Subsection (c) to read as follows:
(c) Notwithstanding Subsection (a), a governmental entity
is not liable as a surety under Subsection (a)(1) if a prime
contractor of a nongovernmental entity leasing property from the
governmental entity fails to submit to the governmental entity the
notice of commencement required by Section 2253.0405.
SECTION 6. Subchapter C, Chapter 2253, Government Code, is
amended by adding Section 2253.0405 to read as follows:
Sec. 2253.0405. NOTICE OF COMMENCEMENT REQUIRED FOR CERTAIN
PUBLIC WORKS CONTRACTS. A nongovernmental entity leasing public
property from a governmental entity that enters into a public works
contract with a prime contractor shall require the contractor at
least 10 days before beginning the work to submit to the
governmental entity a notice of commencement that:
(1) identifies the contract;
(2) identifies the specific leasehold at which the
work will be performed;
(3) describes the work to be performed; and
(4) states the total cost of the work to be performed.
SECTION 7. Section 2253.071(a), Government Code, is amended
to read as follows:
(a) The proceeds of a public work contract are not payable,
until all costs of completion of the contract work are paid by the
contractor or the contractor's surety, to a contractor who
furnishes a bond required by this chapter if:
(1) the contractor abandons performance of the
contract; or
(2) the contractor's right to proceed with performance
of the contract is lawfully terminated by the awarding governmental
entity or nongovernmental entity leasing public property from the
governmental entity because of the contractor's default.
SECTION 8. The changes in law made by this Act apply only to
a public work contract or construction project for which a
governmental entity or a nongovernmental entity leasing public
property from the governmental entity first advertises or otherwise
requests bids, proposals, offers, or qualifications, or makes a
similar solicitation, on or after the effective date of this Act.
SECTION 9. This Act takes effect September 1, 2023.