Enrolled Bill Summary

            House Bill 3158 requires that a surety company be authorized to write surety bonds in Texas in order to execute a bond that indemnifies or pays claims against a mechanic's, contractor's, or materialman's lien or to execute public works performance and payment bonds. In order to execute a bond in excess of $100,000, a surety company is required to hold a certificate of authority from the U. S. secretary of the treasury and obtain certain reinsurance.

            In government contracts, the act requires insurance companies that arrange for replacement of loss to furnish performance and payment bonds as appropriate for the benefit of the government entity and the subcontractors and suppliers. If a payment bond is not issued, then the government entity is liable for payment.