BILL ANALYSIS

H.B. 643

By: Gervin-Hawkins

Delivery of Government Efficiency

Committee Report (Unamended)

BACKGROUND AND PURPOSE

A prime contractor entering into a public work contract with an applicable governmental entity that exceeds $25,000 in value must execute a payment bond as a condition of that contract under current law. The author informed the committee that this statutory requirement can pose a barrier for new or small contractors attempting to bid for these contracts due in part to a lack of experience in the bonding process, which may result in a smaller bidding pool and less competition. H.B. 643 seeks to provide opportunities for new and small businesses to compete for public work contracts by increasing the maximum value of such a contract that triggers the payment bond requirement to $100,000.

CRIMINAL JUSTICE IMPACT

It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.

ANALYSIS

H.B. 643 amends the Government Code to increase from $25,000 to $100,000 the value of a public work contract between a prime contractor and a governmental entity that is not a municipality or a joint airport board that triggers a requirement for the contractor to execute a payment bond. The bill applies only to a public work contract for which a governmental entity first advertises or otherwise requests bids, proposals, offers, or qualifications, or makes a similar solicitation, on or after the bill's effective date. A public work contract for which a governmental entity first advertises or otherwise requests bids, proposals, offers, or qualifications, or makes a similar solicitation, before the bill's effective date is governed by the law as it existed immediately before that date, and that law is continued in effect for that purpose.

EFFECTIVE DATE

September 1, 2025.