Section 2253.021 - Performance and Payment Bonds Required(a) A governmental entity that makes a public work contract with a prime contractor shall require the contractor, before beginning the work, to execute to the governmental entity:(1) a performance bond if the contract is in excess of $100,000; and(2) a payment bond if: (A) the contract is in excess of $25,000, and the governmental entity is not a municipality or a joint board created under Subchapter D, Chapter 22, Transportation Code; or(B) the contract is in excess of $50,000, and the governmental entity is a municipality or a joint board created under Subchapter D, Chapter 22, Transportation Code.(b) The performance bond is: (1) solely for the protection of the state or governmental entity awarding the public work contract;(2) in the amount of the contract; and(3) conditioned on the faithful performance of the work in accordance with the plans, specifications, and contract documents.(c) The payment bond is:(1) solely for the protection and use of payment bond beneficiaries who have a direct contractual relationship with the prime contractor or a subcontractor to supply public work labor or material; and(2) in the amount of the contract.(d) A bond required by this section must be executed by a corporate surety in accordance with Section 1, Chapter 87, Acts of the 56th Legislature, Regular Session, 1959 (Article 7.19-1, Vernon's Texas Insurance Code).(e) A bond executed for a public work contract with the state or a department, board, or agency of the state must be payable to the state and its form must be approved by the attorney general. A bond executed for a public work contract with another governmental entity must be payable to and its form must be approved by the awarding governmental entity.(f) A bond required under this section must clearly and prominently display on the bond or on an attachment to the bond: (1) the name, mailing address, physical address, and telephone number, including the area code, of the surety company to which any notice of claim should be sent; or(2) the toll-free telephone number maintained by the Texas Department of Insurance under Subchapter B, Chapter 521, Insurance Code, and a statement that the address of the surety company to which any notice of claim should be sent may be obtained from the Texas Department of Insurance by calling the toll-free telephone number.(g) A governmental entity may not require a contractor for any public building or other construction contract to obtain a surety bond from any specific insurance or surety company, agent, or broker.(h) A reverse auction procedure may not be used to obtain services related to a public work contract for which a bond is required under this section. In this subsection, "reverse auction procedure" has the meaning assigned by Section 2155.062 or a procedure similar to that described by Section 2155.062.Tex. Gov't. Code § 2253.021
Amended By Acts 2011, 82nd Leg., R.S., Ch. 1129, Sec. 1.01, eff. 9/1/2011.Amended By Acts 2009, 81st Leg., R.S., Ch. 1304, Sec. 1, eff. 9/1/2009.Amended By Acts 2005, 79th Leg., Ch. 728, Sec. 11.122, eff. 9/1/2005.Amended By Acts 2003, 78th Leg., ch. 1275, Sec. 2(86), eff. 9/1/2003.Amended By Acts 2001, 77th Leg., ch. 380, Sec. 1, eff. 9/1/2001Amended By Acts 2001, 77th Leg., ch. 614, Sec. 2, eff. 9/1/2001Amended by Acts 1995, 74th Leg., ch. 76, Sec. 5.43(a), eff. 9/1/1995Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. 9/1/1993.