SRC-TBR H.B. 409 77(R)   BILL ANALYSIS


Senate Research Center   H.B. 409
77R10786 MCK-DBy: Shields (Madla)
Business & Commerce
5/2/2001
Engrossed


DIGEST AND PURPOSE 

Current law does not require that a bondsman's name, address, and telephone
number appear on a payment or performance bond.  As a result, it may be
difficult to locate the bondsman to obtain payment on a government or
private bond.  H.B. 409 requires that performance and payment bonds clearly
display surety company contact information for sending any notice of claim,
or display the tollfree telephone number maintained by the Texas Department
of Insurance for obtaining the address of a surety company.  

RULEMAKING AUTHORITY

This bill does not expressly grant any additional rulemaking authority to a
state officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Section 2253.021, Government Code, by adding Subsection
(f) to require  a bond required under this section to clearly and
prominently display on the bond or on an attachment to the bond certain
information. 

SECTION 2.  Amends Section 2253.024(a), Government Code, to require that a
prime contractor, on the written request of a person who provides public
work labor or material and when required by Subsection (c), to provide to
the person the name of the surety issuing the payment bond and the
performance bond and the toll-free telephone number maintained by the Texas
Department of Insurance under Article 1.35D, Insurance Code, for obtaining
information concerning licensed insurance companies. 

SECTION 3.  Amends Section 2253.026, Government Code, by amending
Subsection (a) and adding Subsection (d), as follows: 

(a)  Requires a governmental entity to furnish the information required by
Subsection (d) to any person who applies for the information and who
submits an affidavit that the person has supplied public work labor or
material for which the person has not been paid; has contracted for
specially fabricated material for which the person has not been paid; or is
being sued on a payment bond. 

(d)  Requires a governmental entity to furnish the following information to
a person who makes a request under Subsection (a): a certified copy of a
payment bond and any attachment to the bond; the public work contract for
which the bond was given; and the toll-free telephone number maintained by
the Texas Department of Insurance under Article 1.35D, Insurance Code, for
obtaining information concerning licensed insurance companies. 

SECTION 4.  Amends Section 2253.048, Government Code, by adding Subsection
(c), to provide that a person satisfies the requirements of this subchapter
relating to providing notice to the surety if the person mails the notice
by certified or registered mail to the surety at the address stated on the
bond or  on an attachment to the bond, at the address on file with the
Texas Department of Insurance, or at any other address allowed by law. 

SECTION 5.  Amends Section 53.202, Property Code, to require the bond to
clearly and prominently display on the bond or on an attachment to the
bond: the name, mailing address, physical address, and telephone number,
including the area code, of the surety company to which any notice of claim
should be sent or the toll-free telephone number maintained by the Texas
Department of Insurance under Article 1.35D, Insurance Code, and a
statement that the address of the surety company to which any notice of
claim should be sent may be obtained from the Texas Department of Insurance
by calling the toll-free telephone number. 

SECTION 6.  Amends Section 53.206, Property Code, by adding Subsection (d),
to provide that a person satisfies the requirements of this section
relating to providing notice to the surety if the person mails the notice
by certified or registered mail to the surety at the address stated on the
bond or on an attachment to the bond, at the address on file with the Texas
Department of Insurance or at any other address allowed by law. 

SECTION 7.  Effective date: September 1, 2001.  Makes application of this
Act prospective.