SRC-CTC S.B. 1268 77(R)BILL ANALYSIS


Senate Research CenterS.B. 1268
By: Madla
Business & Commerce
6/8/2001
Enrolled


DIGEST AND PURPOSE 

Currently, directed sureties are allowed in Texas, while 25 states and the
federal government prohibit a directed surety on a government/public
construction project.  S.B. 1268 prohibits directed surety on
government/public projects in Texas.  However, surety bonds are still
required for government/public construction projects. 

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 2166.258, Government Code, by amending
Subsection (b) and adding Subsection (c), as follows: 

(b) Prohibits the General Services Commission (commission) or other state
agency, in accordance with Section 1, Chapter 87, Acts of the 56th
Legislature, Regular Session, 1959, from requiring a contractor or
subcontractor for any public building or other construction contract to
obtain a surety bond from any specific insurance or surety company, agent,
or broker.  Authorizes the commission or other agency, to the extent
consistent with that law, to require a contractor or subcontractor to meet
part or all of the bonding or insurance requirements for the project under
the negotiated arrangement.  Deletes existing text pertaining to
negotiations made by the commission. 

(c) Requires the commission, for the purposes of this section, to establish
a program to provide surety technical assistance services for the benefit
of small businesses and historically underutilized businesses.  Authorizes
the commission to contract with insurance companies, surety companies,
agents, or brokers to implement this program.   

SECTION 2.  Amends Section 2253.021, Government Code, to prohibit a
governmental entity from requiring a contractor for any public building or
other construction contract to obtain a surety bond from any specific
insurance or surety company, agent, or broker. 

SECTION 3.  Effective date: September 1, 2001.
  Makes application of this Act prospective.