1-1  By:  Cuellar of Hidalgo, et al. (Senate Sponsor - West) H.B. No. 31
    1-2        (In the Senate - Received from the House May 13, 1993;
    1-3  May 14, 1993, read first time and referred to Committee on Economic
    1-4  Development; May 24, 1993, reported adversely, with favorable
    1-5  Committee Substitute by the following vote:  Yeas 9, Nays 0;
    1-6  May 24, 1993, sent to printer.)
    1-7                            COMMITTEE VOTE
    1-8                          Yea     Nay      PNV      Absent 
    1-9        Parker             x                               
   1-10        Lucio              x                               
   1-11        Ellis              x                               
   1-12        Haley                                          x   
   1-13        Harris of Dallas   x                               
   1-14        Harris of Tarrant  x                               
   1-15        Leedom             x                               
   1-16        Madla              x                               
   1-17        Rosson             x                               
   1-18        Shapiro            x                               
   1-19        Wentworth                                      x   
   1-20  COMMITTEE SUBSTITUTE FOR H.B. No. 31                     By:  Ellis
   1-21                         A BILL TO BE ENTITLED
   1-22                                AN ACT
   1-23  relating to  a performance bond or payment bond executed in
   1-24  connection with a public works or public construction contract.
   1-25        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
   1-26        SECTION 1.  Article 5160, Revised Statutes, is amended by
   1-27  amending Section A and adding Section J to read as follows:
   1-28        A.  Any person or persons, firm, or corporation, hereinafter
   1-29  referred to as "prime contractor," entering into a formal contract
   1-30  in excess of  the amounts specified by this section <$25,000> with
   1-31  this State, any department, board or agency thereof; or any county
   1-32  of this State, department, board or agency thereof; or any
   1-33  municipality of this State, department, board or agency thereof; or
   1-34  any school district in this State, common or independent, or
   1-35  subdivision thereof; or any other governmental or
   1-36  quasi-governmental authority whether specifically named herein or
   1-37  not, authorized under any law of this State, general or local, to
   1-38  enter into contractual agreements for the construction, alteration
   1-39  or repair of any public building or the prosecution or completion
   1-40  of any public work, shall be required before commencing such work
   1-41  to execute to the aforementioned governmental authority or
   1-42  authorities, as the case may be, the statutory bonds as hereinafter
   1-43  prescribed<, but no governmental authority may require a bond if
   1-44  the contract does not exceed the sum of $25,000>.  Each such bond
   1-45  shall be executed by a corporate surety or corporate sureties in
   1-46  accordance with Section 1, Chapter 87, Acts of the 56th
   1-47  Legislature, Regular Session, 1959 (Article 7.19-1, Vernon's Texas
   1-48  Insurance Code). In the case of contracts of the State or a
   1-49  department, board, or agency thereof, the aforesaid bonds shall be
   1-50  payable to the State and shall be approved by the Attorney General
   1-51  as to form.  In case of all other contracts subject to this Act,
   1-52  the bonds shall be payable to the governmental awarding authority
   1-53  concerned, and shall be approved by it as to form.  Any bond
   1-54  furnished by any prime contractor in an attempted compliance with
   1-55  this Act shall be treated and construed as in conformity with the
   1-56  requirements of this Act as to rights created, limitations thereon,
   1-57  and remedies provided.  Any provision in any bond furnished by a
   1-58  prime contractor in attempted compliance with this Act that expands
   1-59  or restricts the rights or liabilities provided under this Act
   1-60  shall be disregarded and the provisions of this Act shall be read
   1-61  into that bond.
   1-62        (a)  For a contract in excess of $100,000, a <A> Performance
   1-63  Bond shall be executed in the amount of the contract conditioned
   1-64  upon the faithful performance of the work in accordance with the
   1-65  plans, specifications, and contract documents.  Said bond shall be
   1-66  solely for the protection of the State or the governmental
   1-67  authority awarding the contract, as the case may be.
   1-68        (b)  For a contract in excess of $25,000, a <A> Payment Bond
    2-1  shall be executed, in the amount of the contract, solely for the
    2-2  protection of all claimants supplying labor and material as
    2-3  hereinafter defined, in the prosecution of the work provided for in
    2-4  said contract, for the use of each such claimant.
    2-5        Notwithstanding any provision in this Act or in Chapter 252
    2-6  or 262, Local Government Code, if the governmental authority fails
    2-7  to obtain from the prime contractor a payment bond in compliance
    2-8  with this Act covering a contract in excess of $25,000, the
    2-9  authority is subject to the same liability as that of a surety who
   2-10  had issued a valid bond if the authority had complied with this
   2-11  section, and a claimant is entitled to a lien on funds due the
   2-12  prime contractor in the same manner and to the same extent as if
   2-13  the contract were subject to Subchapter J, Chapter 53, Property
   2-14  Code.
   2-15        J.  A governmental authority that awards the contract for the
   2-16  construction, alteration, or repair of a public building or for the
   2-17  prosecution or completion of any public work may provide for
   2-18  payment of the prime contractor in installments based on completion
   2-19  of work under the contract.
   2-20        SECTION 2.  Section 252.044(c), Local Government Code, is
   2-21  amended to read as follows:
   2-22        (c)  The governing body of a home-rule municipality <by
   2-23  ordinance> may:
   2-24              (1)  by ordinance adopt the provisions of this section
   2-25  and Article 5160, Revised Statutes, relating to contractors' surety
   2-26  bonds, regardless of a conflicting provision in the municipality's
   2-27  charter; and
   2-28              (2)  provide that a contractor will be paid in
   2-29  installments based on completion of work under the contract.
   2-30        SECTION 3.  Section 262.032, Local Government Code, is
   2-31  amended by adding Subsection (e) to read as follows:
   2-32        (e)  The county may provide in the bid notice or request for
   2-33  proposals that money will be paid to the contractor in installments
   2-34  based on completion of work under the contract.
   2-35        SECTION 4.  Section 252.044(b), Local Government Code, is
   2-36  repealed.
   2-37        SECTION 5.  This Act takes effect September 1, 1993, and
   2-38  applies only to a contract entered into on or after that date.  A
   2-39  contract entered into before the effective date of this Act is
   2-40  governed by the law in effect when the contract was entered into,
   2-41  and the former law is continued in effect for that purpose.
   2-42        SECTION 6.  The importance of this legislation and the
   2-43  crowded condition of the calendars in both houses create an
   2-44  emergency and an imperative public necessity that the
   2-45  constitutional rule requiring bills to be read on three several
   2-46  days in each house be suspended, and this rule is hereby suspended.
   2-47                               * * * * *
   2-48                                                         Austin,
   2-49  Texas
   2-50                                                         May 24, 1993
   2-51  Hon. Bob Bullock
   2-52  President of the Senate
   2-53  Sir:
   2-54  We, your Committee on Economic Development to which was referred
   2-55  H.B. No. 31, have had the same under consideration, and I am
   2-56  instructed to report it back to the Senate with the recommendation
   2-57  that it do not pass, but that the Committee Substitute adopted in
   2-58  lieu thereof do pass and be printed.
   2-59                                                         Parker,
   2-60  Chairman
   2-61                               * * * * *
   2-62                               WITNESSES
   2-63                                                  FOR   AGAINST  ON
   2-64  ___________________________________________________________________
   2-65  Name:  Robert Bass                                             x
   2-66  Representing:  Lumbermen's Assn. of Texas
   2-67  City:  Austin
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