1-1 By: Shields, et al. (Senate Sponsor - Madla) H.B. No. 409
1-2 (In the Senate - Received from the House April 19, 2001;
1-3 April 20, 2001, read first time and referred to Committee on
1-4 Business and Commerce; May 7, 2001, reported favorably by the
1-5 following vote: Yeas 7, Nays 0; May 7, 2001, sent to printer.)
1-6 A BILL TO BE ENTITLED
1-7 AN ACT
1-8 relating to the requirement that the name, address, and phone
1-9 number of a bondsman appear on the face of performance and payment
1-10 bonds.
1-11 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-12 SECTION 1. Section 2253.021, Government Code, is amended by
1-13 adding Subsection (f) to read as follows:
1-14 (f) A bond required under this section must clearly and
1-15 prominently display on the bond or on an attachment to the bond:
1-16 (1) the name, mailing address, physical address, and
1-17 telephone number, including the area code, of the surety company to
1-18 which any notice of claim should be sent; or
1-19 (2) the toll-free telephone number maintained by the
1-20 Texas Department of Insurance under Article 1.35D, Insurance Code,
1-21 and a statement that the address of the surety company to which any
1-22 notice of claim should be sent may be obtained from the Texas
1-23 Department of Insurance by calling the toll-free telephone number.
1-24 SECTION 2. Section 2253.024(a), Government Code, is amended
1-25 to read as follows:
1-26 (a) A prime contractor, on the written request of a person
1-27 who provides public work labor or material and when required by
1-28 Subsection (c), shall provide to the person:
1-29 (1) the name and last known address of the
1-30 governmental entity with whom the prime contractor contracted for
1-31 the public work; [and]
1-32 (2) a copy of the payment and performance bonds for
1-33 the public work, including bonds furnished by or to the prime
1-34 contractor; and
1-35 (3) the name of the surety issuing the payment bond
1-36 and the performance bond and the toll-free telephone number
1-37 maintained by the Texas Department of Insurance under Article
1-38 1.35D, Insurance Code, for obtaining information concerning
1-39 licensed insurance companies.
1-40 SECTION 3. Section 2253.026, Government Code, is amended by
1-41 amending Subsection (a) and adding Subsection (d) to read as
1-42 follows:
1-43 (a) A governmental entity shall furnish the information
1-44 required by Subsection (d) [a certified copy of a payment bond and
1-45 the public work contract for which the bond was given] to any
1-46 person who applies for the information [copy] and who submits an
1-47 affidavit that the person:
1-48 (1) has supplied public work labor or material for
1-49 which the person has not been paid;
1-50 (2) has contracted for specially fabricated material
1-51 for which the person has not been paid; or
1-52 (3) is being sued on a payment bond.
1-53 (d) A governmental entity shall furnish the following
1-54 information to a person who makes a request under Subsection (a):
1-55 (1) a certified copy of a payment bond and any
1-56 attachment to the bond;
1-57 (2) the public work contract for which the bond was
1-58 given; and
1-59 (3) the toll-free telephone number maintained by the
1-60 Texas Department of Insurance under Article 1.35D, Insurance Code,
1-61 for obtaining information concerning licensed insurance companies.
1-62 SECTION 4. Section 2253.048, Government Code, is amended by
1-63 adding Subsection (c) to read as follows:
1-64 (c) A person satisfies the requirements of this subchapter
2-1 relating to providing notice to the surety if the person mails the
2-2 notice by certified or registered mail to the surety:
2-3 (1) at the address stated on the bond or on an
2-4 attachment to the bond;
2-5 (2) at the address on file with the Texas Department
2-6 of Insurance; or
2-7 (3) at any other address allowed by law.
2-8 SECTION 5. Section 53.202, Property Code, is amended to read
2-9 as follows:
2-10 Sec. 53.202. BOND REQUIREMENTS. The bond must:
2-11 (1) be in a penal sum at least equal to the total of
2-12 the original contract amount;
2-13 (2) be in favor of the owner;
2-14 (3) have the written approval of the owner endorsed on
2-15 it;
2-16 (4) be executed by:
2-17 (A) the original contractor as principal; and
2-18 (B) a corporate surety authorized and admitted
2-19 to do business in this state and licensed by this state to execute
2-20 bonds as surety, subject to Section 1, Chapter 87, Acts of the 56th
2-21 Legislature, Regular Session, 1959 (Article 7.19-1, Vernon's Texas
2-22 Insurance Code); [and]
2-23 (5) be conditioned on prompt payment for all labor,
2-24 subcontracts, materials, specially fabricated materials, and normal
2-25 and usual extras not exceeding 15 percent of the contract price;
2-26 and
2-27 (6) clearly and prominently display on the bond or on
2-28 an attachment to the bond:
2-29 (A) the name, mailing address, physical address,
2-30 and telephone number, including the area code, of the surety
2-31 company to which any notice of claim should be sent; or
2-32 (B) the toll-free telephone number maintained by
2-33 the Texas Department of Insurance under Article 1.35D, Insurance
2-34 Code, and a statement that the address of the surety company to
2-35 which any notice of claim should be sent may be obtained from the
2-36 Texas Department of Insurance by calling the toll-free telephone
2-37 number.
2-38 SECTION 6. Section 53.206, Property Code, is amended by
2-39 adding Subsection (d) to read as follows:
2-40 (d) A person satisfies the requirements of this section
2-41 relating to providing notice to the surety if the person mails the
2-42 notice by certified or registered mail to the surety:
2-43 (1) at the address stated on the bond or on an
2-44 attachment to the bond;
2-45 (2) at the address on file with the Texas Department
2-46 of Insurance; or
2-47 (3) at any other address allowed by law.
2-48 SECTION 7. This Act takes effect September 1, 2001. The
2-49 changes in law made by this Act to Section 2253.021, Government
2-50 Code, and to Section 53.202, Property Code, apply only to a bond
2-51 issued on or after the effective date of this Act.
2-52 * * * * *