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AN ACT
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relating to required lease terms for public property leased to a |
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nongovernmental entity; creating a criminal offense. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subchapter Z, Chapter 2252, Government Code, is |
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amended by adding Section 2252.909 to read as follows: |
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Sec. 2252.909. REQUIRED LEASE TERMS FOR LEASE OF PUBLIC |
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PROPERTY. (a) In this section, "governmental entity" has the |
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meaning assigned by Section 2253.001. |
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(b) A lease between a governmental entity and another person |
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regarding public property must contain lease terms requiring the |
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person to: |
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(1) include in each contract for the construction, |
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alteration, or repair of an improvement to the leased property a |
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condition that the contractor: |
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(A) execute a payment bond that conforms to |
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Subchapter I, Chapter 53, Property Code; and |
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(B) execute a performance bond in an amount equal |
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to the amount of the contract for the protection of the governmental |
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entity and conditioned on the faithful performance of the |
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contractor's work in accordance with the plans, specifications, and |
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contract documents; and |
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(2) provide to the governmental entity a notice of |
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commencement consistent with this section at least 90 days before |
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the date the construction, alteration, or repair of any improvement |
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to the leased property begins. |
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(c) A notice of commencement under Subsection (b) must: |
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(1) identify the public property where the work will |
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be performed; |
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(2) describe the work to be performed; |
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(3) state the total cost of the work to be performed; |
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(4) include copies of the performance and payment |
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bonds required under Subsection (b); and |
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(5) include a written acknowledgment signed by the |
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contractor stating that copies of the required performance and |
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payment bonds will be provided to all subcontractors not later than |
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the fifth day after the date a subcontract is executed. |
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(d) On or before the 10th day after the date a governmental |
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entity receives a notice of commencement for the construction, |
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alteration, or repair of an improvement to leased property required |
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under Subsection (b)(2), the governmental entity may notify the |
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leaseholder that the construction, alteration, or repair may not |
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proceed. |
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(e) A person commits an offense if the person materially |
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misrepresents information in a notice of commencement. An offense |
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under this subsection is a Class A misdemeanor. |
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SECTION 2. Section 2253.027, Government Code, is amended by |
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amending Subsection (a) and adding Subsection (c) to read as |
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follows: |
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(a) If a governmental entity fails to obtain from a prime |
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contractor a payment bond as required by Section 2253.021 or fails |
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to include in a lease the lease terms required by Section 2252.909: |
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(1) the entity is subject to the same liability that a |
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surety would have if the surety had issued a payment bond and if the |
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entity had obtained the bond; and |
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(2) a payment bond beneficiary is entitled to a lien on |
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money due to the prime contractor in the same manner and to the same |
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extent as if the public work contract were subject to Subchapter J, |
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Chapter 53, Property Code. |
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(c) A governmental entity is not liable as a surety under |
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Subsection (a)(1) if a person leasing property from the entity |
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fails to submit to the entity the notice of commencement required by |
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Section 2252.909. |
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SECTION 3. The changes in law made by this Act apply only to |
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a lease for public property entered into or renewed by a |
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governmental entity on or after the effective date of this Act. |
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SECTION 4. This Act takes effect September 1, 2023. |
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______________________________ |
______________________________ |
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President of the Senate |
Speaker of the House |
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I certify that H.B. No. 2518 was passed by the House on April |
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27, 2023, by the following vote: Yeas 147, Nays 0, 1 present, not |
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voting. |
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______________________________ |
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Chief Clerk of the House |
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I certify that H.B. No. 2518 was passed by the Senate on May |
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16, 2023, by the following vote: Yeas 31, Nays 0. |
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______________________________ |
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Secretary of the Senate |
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APPROVED: _____________________ |
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Date |
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_____________________ |
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Governor |