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78R3535 ATP-D

By:  Madden                                                       H.B. No. 1171



A BILL TO BE ENTITLED

AN ACT

relating to the notice required to be given to a governmental entity 
to recover in a suit on a payment bond.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Section 2253.027, Government Code, is amended to 
read as follows:
	Sec. 2253.027.  LIABILITY OF GOVERNMENTAL ENTITY.  (a)  If a 
governmental entity fails to obtain from a prime contractor a 
payment bond as required by Section 2253.021:
		(1)  the entity is subject to the same liability that a 
surety would have if the surety had issued a payment bond and if the 
entity had obtained the bond;  and
		(2)  a payment bond beneficiary is entitled to a lien on 
money due to the prime contractor in the same manner and to the same 
extent as if the public work contract were subject to Subchapter J, 
Chapter 53, Property Code.
	(b)  To recover in a suit under Subsection (a), the only 
notice a payment bond beneficiary is required to provide to the 
governmental entity is a notice provided in the same manner as 
described by Subchapter C.  The notice must be provided as if the 
governmental entity were a surety.
	SECTION 2.  (a)  This Act takes effect September 1, 2003.                      
	(b)  The change in law made by this Act applies only to a suit 
filed under Section 2253.027, Government Code, as amended by this 
Act, on or after September 1, 2003.  A suit filed before September 
1, 2003, is covered by the law in effect when the suit was filed, and 
the former law is continued in effect for that purpose.