89R23382 GP-D

By: Bell of Kaufman H.B. No. 5435

Substitute the following for H.B. No. 5435:

By: King C.S.H.B. No. 5435

A BILL TO BE ENTITLED

AN ACT

relating to required lease terms for public property leased to a nongovernmental entity.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 2252.909, Government Code, as added by Chapter 1008 (H.B. 2518), Acts of the 88th Legislature, Regular Session, 2023, is amended by amending Subsection (b) and adding Subsection (b-1) to read as follows:

(b) Except as provided by Subsection (b-1), a [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.

(b-1) The requirement that a lease must contain a term requiring notice of commencement to a governmental entity under Subsection (b)(2) does not apply to a lease between an institution of higher education, as defined by Section 61.003, Education Code, and another person regarding public property.

SECTION 2. The change in law made by this Act applies only to a lease between a governmental entity and another person regarding public property that is entered into on or after the effective date of this Act.

SECTION 3. This Act takes effect September 1, 2025.