By:  Madla                                            S.B. No. 1268
         Line and page numbers may not match official copy.
         Bill not drafted by TLC or Senate E&E.
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to reinstating the general rule that a surety bond for a
 1-3     public project may be executed by any surety company authorized to
 1-4     do business in this state.
 1-5           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-6           SECTION 1.  Section 2253.021(e), Government Code, is amended
 1-7     to read as follows:
 1-8           (e)  The bond executed for a public work contract with the
 1-9     state or a department, board, or agency of the state must be
1-10     payable to the state and its form must be approved by the Attorney
1-11     General.  A bond executed for a public work contract with another
1-12     governmental entity must be payable to and its form must be
1-13     approved by the awarding governmental entity.  No government entity
1-14     shall, with respect to any public building or construction
1-15     contract, require the contractor to procure any of the surety bonds
1-16     specified in connection with such contract or specified by any law
1-17     from any particular insurance or surety company, agent or broker.
1-18           SECTION 2.  Section 2166.258(b), Government Code, is amended
1-19     to read as follows:
1-20           (b)  In accordance with [not withstanding] Section 1, Chapter
1-21     87, Acts of the 56th Legislature, Regular Session, 1959 (Article
1-22     7,19-1, Vernon's Texas Insurance Code, the commission or other
1-23     state agency may not, with respect to any public building or
 2-1     construction contract, require a contractor or subcontractor to
 2-2     obtain or procure any of the surety bonds specified in connection
 2-3     with such contract or specified by any law from any particular
 2-4     insurance or surety company, agent or broker.  To the extent not
 2-5     prohibited by that law, the commission or other agency may require
 2-6     a contractor or subcontractor to meet part or all of the other
 2-7     insurance requirements for the project under the negotiated
 2-8     arrangement.
 2-9           SECTION 3.  This Act takes effect September 1, 2001.
2-10           (b)  The change in law made by this Act applies only to a
2-11     contract or subcontract for a construction project, that is made on
2-12     or after the effective date of this Act.  A contract or subcontract
2-13     that is made before the effective date of this Act is governed by
2-14     the law in effect at the time the contract is made, and that law is
2-15     continued in effect for that purpose.