By: Bell of Kaufman, et al. H.B. No. 2518
        (Senate Sponsor - Nichols)
         (In the Senate - Received from the House May 1, 2023;
  May 2, 2023, read first time and referred to Committee on Business &
  Commerce; May 12, 2023, reported favorably by the following vote:  
  Yeas 11, Nays 0; May 12, 2023, sent to printer.)
Click here to see the committee vote
 
 
A BILL TO BE ENTITLED
 
AN ACT
 
  relating to required lease terms for public property leased to a
  nongovernmental entity; creating a criminal offense.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Subchapter Z, Chapter 2252, Government Code, is
  amended by adding Section 2252.909 to read as follows:
         Sec. 2252.909.  REQUIRED LEASE TERMS FOR LEASE OF PUBLIC
  PROPERTY. (a) In this section, "governmental entity" has the
  meaning assigned by Section 2253.001.
         (b)  A lease between a governmental entity and another person
  regarding public property must contain lease terms requiring the
  person to:
               (1)  include in each contract for the construction,
  alteration, or repair of an improvement to the leased property a
  condition that the contractor:
                     (A)  execute a payment bond that conforms to
  Subchapter I, Chapter 53, Property Code; and
                     (B)  execute a performance bond in an amount equal
  to the amount of the contract for the protection of the governmental
  entity and conditioned on the faithful performance of the
  contractor's work in accordance with the plans, specifications, and
  contract documents; and
               (2)  provide to the governmental entity a notice of
  commencement consistent with this section at least 90 days before
  the date the construction, alteration, or repair of any improvement
  to the leased property begins.
         (c)  A notice of commencement under Subsection (b) must:
               (1)  identify the public property where the work will
  be performed;
               (2)  describe the work to be performed;
               (3)  state the total cost of the work to be performed;
               (4)  include copies of the performance and payment
  bonds required under Subsection (b); and
               (5)  include a written acknowledgment signed by the
  contractor stating that copies of the required performance and
  payment bonds will be provided to all subcontractors not later than
  the fifth day after the date a subcontract is executed.
         (d)  On or before the 10th day after the date a governmental
  entity receives a notice of commencement for the construction,
  alteration, or repair of an improvement to leased property required
  under Subsection (b)(2), the governmental entity may notify the
  leaseholder that the construction, alteration, or repair may not
  proceed.
         (e)  A person commits an offense if the person materially
  misrepresents information in a notice of commencement. An offense
  under this subsection is a Class A misdemeanor.
         SECTION 2.  Section 2253.027, Government Code, is amended by
  amending Subsection (a) and adding Subsection (c) to read as
  follows:
         (a)  If a governmental entity fails to obtain from a prime
  contractor a payment bond as required by Section 2253.021 or fails
  to include in a lease the lease terms required by Section 2252.909:
               (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.
         (c)  A governmental entity is not liable as a surety under
  Subsection (a)(1) if a person leasing property from the entity
  fails to submit to the entity the notice of commencement required by
  Section 2252.909.
         SECTION 3.  The changes in law made by this Act apply only to
  a lease for public property entered into or renewed by a
  governmental entity on or after the effective date of this Act.
         SECTION 4.  This Act takes effect September 1, 2023.
 
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