73R9129 CAG-D
By Cuellar of Hidalgo, Romo, Solis, et al. H.B. No. 31
Substitute the following for H.B. No. 31:
By Jones of Lubbock C.S.H.B. No. 31
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to government contracts for which a performance or payment
1-3 bond is required; providing a penalty.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section A, Article 5160, Revised Statutes, is
1-6 amended to read as follows:
1-7 A. (a) Any person or persons, firm, or corporation,
1-8 hereinafter referred to as "prime contractor," entering into a
1-9 formal contract in excess of $50,000 <$25,000> with this State, any
1-10 department, board or agency thereof; or any county of this State,
1-11 department, board or agency thereof; or any municipality of this
1-12 State, department, board or agency thereof; or any school district
1-13 in this State, common or independent, or subdivision thereof; or
1-14 any other governmental or quasi-governmental authority whether
1-15 specifically named herein or not, authorized under any law of this
1-16 State, general or local, to enter into contractual agreements for
1-17 the construction, alteration or repair of any public building or
1-18 the prosecution or completion of any public work, shall be required
1-19 before commencing such work to execute to the aforementioned
1-20 governmental authority or authorities, as the case may be, the
1-21 statutory bonds as hereinafter prescribed.
1-22 (b) A<, but no> governmental authority, other than a
1-23 municipality, may not require a bond if the contract does not
1-24 exceed the sum of $50,000 <$25,000>. A municipality may not
2-1 require a statutory bond unless the contract exceeds:
2-2 (1) $25,000, in the case of a municipality with a
2-3 population of 5,000 or less according to the most recent federal
2-4 census; or
2-5 (2) $50,000, in the case of a municipality with a
2-6 population of more than 5,000 according to the most recent federal
2-7 census.
2-8 (c) Each such bond shall be executed by a corporate surety
2-9 or corporate sureties in accordance with Section 1, Chapter 87,
2-10 Acts of the 56th Legislature, Regular Session, 1959 (Article
2-11 7.19-1, Vernon's Texas Insurance Code). In the case of contracts
2-12 of the State or a department, board, or agency thereof, the
2-13 aforesaid bonds shall be payable to the State and shall be approved
2-14 by the Attorney General as to form. In case of all other contracts
2-15 subject to this Act, the bonds shall be payable to the governmental
2-16 awarding authority concerned, and shall be approved by it as to
2-17 form.
2-18 (d) Any bond furnished by any prime contractor in an
2-19 attempted compliance with this Act shall be treated and construed
2-20 as in conformity with the requirements of this Act as to rights
2-21 created, limitations thereon, and remedies provided. Any provision
2-22 in any bond furnished by a prime contractor in attempted compliance
2-23 with this Act that expands or restricts the rights or liabilities
2-24 provided under this Act shall be disregarded and the provisions of
2-25 this Act shall be read into that bond.
2-26 (e) <(a)> A Performance Bond in the amount of the contract
2-27 conditioned upon the faithful performance of the work in accordance
3-1 with the plans, specifications, and contract documents. Said bond
3-2 shall be solely for the protection of the State or the governmental
3-3 authority awarding the contract, as the case may be.
3-4 (f) <(b)> A Payment Bond, in the amount of the contract,
3-5 solely for the protection of all claimants supplying labor and
3-6 material as hereinafter defined, in the prosecution of the work
3-7 provided for in said contract, for the use of each such claimant.
3-8 (g) Notwithstanding any provision in this Act or in Chapter
3-9 252 or 262, Local Government Code, if the governmental authority
3-10 fails to obtain from the prime contractor a payment bond in
3-11 compliance with this Act covering a contract in excess of $50,000
3-12 <$25,000>, the authority is subject to the same liability as that
3-13 of a surety who had issued a valid bond if the authority had
3-14 complied with this section, and a claimant is entitled to a lien on
3-15 funds due the prime contractor in the same manner and to the same
3-16 extent as if the contract were subject to Subchapter J, Chapter 53,
3-17 Property Code.
3-18 (h) A project or work that is covered by this Act may not be
3-19 divided into separate units of work to avoid the bonding
3-20 requirements imposed by this Act.
3-21 (i) An officer or employee of the State or other
3-22 governmental entity covered by this Act commits an offense if the
3-23 officer or employee intentionally or knowingly executes or
3-24 authorizes execution of a formal contract that violates Subsection
3-25 (h) of this section. An offense under this subsection is a Class B
3-26 misdemeanor.
3-27 SECTION 2. This Act takes effect September 1, 1993, and the
4-1 changes in law made by this Act, relating to the contractual amount
4-2 that requires the execution of bonds, apply only to a contract
4-3 entered on or after that date. A contract entered before the
4-4 effective date of this Act is governed by Section A, Article 5160,
4-5 Revised Statutes, as it existed before the effective date of this
4-6 Act, and the former law is continued in effect for this purpose.
4-7 SECTION 3. The importance of this legislation and the
4-8 crowded condition of the calendars in both houses create an
4-9 emergency and an imperative public necessity that the
4-10 constitutional rule requiring bills to be read on three several
4-11 days in each house be suspended, and this rule is hereby suspended.