77R10786 MCK-D
By Shields, et al. H.B. No. 409
Substitute the following for H.B. No. 409:
By Longoria C.S.H.B. No. 409
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the requirement that the name, address, and phone
1-3 number of a bondsman appear on the face of performance and payment
1-4 bonds.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. Section 2253.021, Government Code, is amended by
1-7 adding Subsection (f) to read as follows:
1-8 (f) A bond required under this section must clearly and
1-9 prominently display on the bond or on an attachment to the bond:
1-10 (1) the name, mailing address, physical address, and
1-11 telephone number, including the area code, of the surety company to
1-12 which any notice of claim should be sent; or
1-13 (2) the toll-free telephone number maintained by the
1-14 Texas Department of Insurance under Article 1.35D, Insurance Code,
1-15 and a statement that the address of the surety company to which any
1-16 notice of claim should be sent may be obtained from the Texas
1-17 Department of Insurance by calling the toll-free telephone number.
1-18 SECTION 2. Section 2253.024(a), Government Code, is amended
1-19 to read as follows:
1-20 (a) A prime contractor, on the written request of a person
1-21 who provides public work labor or material and when required by
1-22 Subsection (c), shall provide to the person:
1-23 (1) the name and last known address of the
1-24 governmental entity with whom the prime contractor contracted for
2-1 the public work; [and]
2-2 (2) a copy of the payment and performance bonds for
2-3 the public work, including bonds furnished by or to the prime
2-4 contractor; and
2-5 (3) the name of the surety issuing the payment bond
2-6 and the performance bond and the toll-free telephone number
2-7 maintained by the Texas Department of Insurance under Article
2-8 1.35D, Insurance Code, for obtaining information concerning
2-9 licensed insurance companies.
2-10 SECTION 3. Section 2253.026, Government Code, is amended by
2-11 amending Subsection (a) and adding Subsection (d) to read as
2-12 follows:
2-13 (a) A governmental entity shall furnish the information
2-14 required by Subsection (d) [a certified copy of a payment bond and
2-15 the public work contract for which the bond was given] to any
2-16 person who applies for the information [copy] and who submits an
2-17 affidavit that the person:
2-18 (1) has supplied public work labor or material for
2-19 which the person has not been paid;
2-20 (2) has contracted for specially fabricated material
2-21 for which the person has not been paid; or
2-22 (3) is being sued on a payment bond.
2-23 (d) A governmental entity shall furnish the following
2-24 information to a person who makes a request under Subsection (a):
2-25 (1) a certified copy of a payment bond and any
2-26 attachment to the bond;
2-27 (2) the public work contract for which the bond was
3-1 given; and
3-2 (3) the toll-free telephone number maintained by the
3-3 Texas Department of Insurance under Article 1.35D, Insurance Code,
3-4 for obtaining information concerning licensed insurance companies.
3-5 SECTION 4. Section 2253.048, Government Code, is amended by
3-6 adding Subsection (c) to read as follows:
3-7 (c) A person satisfies the requirements of this subchapter
3-8 relating to providing notice to the surety if the person mails the
3-9 notice by certified or registered mail to the surety:
3-10 (1) at the address stated on the bond or on an
3-11 attachment to the bond;
3-12 (2) at the address on file with the Texas Department
3-13 of Insurance; or
3-14 (3) at any other address allowed by law.
3-15 SECTION 5. Section 53.202, Property Code, is amended to read
3-16 as follows:
3-17 Sec. 53.202. BOND REQUIREMENTS. The bond must:
3-18 (1) be in a penal sum at least equal to the total of
3-19 the original contract amount;
3-20 (2) be in favor of the owner;
3-21 (3) have the written approval of the owner endorsed on
3-22 it;
3-23 (4) be executed by:
3-24 (A) the original contractor as principal; and
3-25 (B) a corporate surety authorized and admitted
3-26 to do business in this state and licensed by this state to execute
3-27 bonds as surety, subject to Section 1, Chapter 87, Acts of the 56th
4-1 Legislature, Regular Session, 1959 (Article 7.19-1, Vernon's Texas
4-2 Insurance Code); [and]
4-3 (5) be conditioned on prompt payment for all labor,
4-4 subcontracts, materials, specially fabricated materials, and normal
4-5 and usual extras not exceeding 15 percent of the contract price;
4-6 and
4-7 (6) clearly and prominently display on the bond or on
4-8 an attachment to the bond:
4-9 (A) the name, mailing address, physical address,
4-10 and telephone number, including the area code, of the surety
4-11 company to which any notice of claim should be sent; or
4-12 (B) the toll-free telephone number maintained by
4-13 the Texas Department of Insurance under Article 1.35D, Insurance
4-14 Code, and a statement that the address of the surety company to
4-15 which any notice of claim should be sent may be obtained from the
4-16 Texas Department of Insurance by calling the toll-free telephone
4-17 number.
4-18 SECTION 6. Section 53.206, Property Code, is amended by
4-19 adding Subsection (d) to read as follows:
4-20 (d) A person satisfies the requirements of this section
4-21 relating to providing notice to the surety if the person mails the
4-22 notice by certified or registered mail to the surety:
4-23 (1) at the address stated on the bond or on an
4-24 attachment to the bond;
4-25 (2) at the address on file with the Texas Department
4-26 of Insurance; or
4-27 (3) at any other address allowed by law.
5-1 SECTION 7. This Act takes effect September 1, 2001. The
5-2 changes in law made by this Act to Section 2253.021, Government
5-3 Code, and to Section 53.202, Property Code, apply only to a bond
5-4 issued on or after the effective date of this Act.