IMF H.B. 1430 75(R)BILL ANALYSIS


STATE AFFAIRS
H.B. 1430
By: Hill
5-9-97
Committee Report (Unamended)



BACKGROUND 

Chapter 2253 of the Government Code is entitled Public Work Performance
and Payment Bonds. It is applicable to any "governmental entity" defined
to include the state, and any county, city, or school district.  It
general requires a performance bond for any contract exceeding $100,000
and a payment bond for any contract exceeding $25,000.  The performance
bond is for the protection of the government and is in the amount of the
contract.  The payment bond is for the protection of subcontractors and
also must be in the amount of the contract.  These bonds are required for
any "public work contract" defined to include any contract "for
constructing, altering, or repairing a public building or carrying out or
completing any public work."  Government Code 2253.027 makes the
government liable for paying subcontractors if a payment bond is not
secured.     

PURPOSE

As proposed, H.B. 1430 would no longer require a payment bond for a
design/build contract for design services only. 

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly grant any
additional rulemaking authority to a state officer, department, agency or
institution. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Section 2253.021 of the Government Code by adding
subsection (f) to state that a payment bond is not required for the
portion of a design/build contract that includes design services only. 

SECTION 2.  Repeals Section 2253.027 providing that a government entity
has the same liability if the entity did not obtain the bond. 

SECTION 3.  Effective date:  September 1, 1997.

SECTION 4.  Makes this Act prospective.

SECTION 5.  Emergency clause.