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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