By:  Madla                                            S.B. No. 1268
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to a surety bond obtained for a public project and
 1-3     executed by a surety company.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1.  Subsection (b), Section 2166.258, Government
 1-6     Code, is amended to read as follows:
 1-7           (b)  In accordance with [Notwithstanding] Section 1, Chapter
 1-8     87, Acts of the 56th Legislature, Regular Session, 1959 (Article
 1-9     7.19-1, Vernon's Texas Insurance Code), the commission or other
1-10     agency may not require a contractor or subcontractor for any public
1-11     building or other construction contract to obtain a surety bond
1-12     from any specific insurance or surety company, agent, or broker.
1-13     To the extent consistent with that law, the commission or other
1-14     agency may require a contractor or subcontractor to meet part or
1-15     all of any other [the bonding or] insurance requirements for the
1-16     project under the negotiated arrangement [negotiated by the
1-17     commission or other agency].
1-18           SECTION 2.  Section 2253.021, Government Code, is amended by
1-19     adding Subsection (f) to read as follows:
1-20           (f)  A governmental entity may not require a contractor for
1-21     any public building or other construction contract to obtain a
1-22     surety bond from any specific insurance or surety company, agent,
1-23     or broker.
1-24           SECTION 3.  (a)  This Act takes effect September 1, 2001.
1-25           (b)  The change in law made by this Act applies only to a
 2-1     contract for a construction project that is made on or after the
 2-2     effective date of this Act.  A contract that is made before the
 2-3     effective date of this Act is governed by the law in effect at the
 2-4     time the contract is made, and that law is continued in effect for
 2-5     that purpose.
 2-6                          COMMITTEE AMENDMENT NO. 1
 2-7           Amend S.B. No. 1268 by striking SECTION 2 of the bill
 2-8     (Engrossed version, page 1, lines 18-23) and substituting the
 2-9     following:
2-10           SECTION 2.  Section 2253.021, Government Code, is amended by
2-11     adding Subsections (f) and (g) to read as follows:
2-12           (f)  A governmental entity may not require a contractor for
2-13     any public building or other construction contract to obtain a
2-14     surety bond from any specific insurance or surety company, agent,
2-15     or broker.
2-16           (g)  For the purposes of this section, the General Services
2-17     Commission shall negotiate with a specific insurance or surety
2-18     company, agent, or broker to establish a surety program for the
2-19     benefit of small businesses and historically underutilized
2-20     businesses.
2-21                                                                Longoria