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Texas Government Code - Section 2253.021. Performance And Payment Bonds Required

Legal Research Home > Texas Laws > Government Code > Texas Government Code - Section 2253.021. Performance And Payment Bonds Required

§ 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 the contract is in excess of 
$25,000.                
	(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.

Added by Acts 1993, 73rd Leg., ch. 268, § 1, eff. Sept. 1, 1993.  
Amended by Acts 1995, 74th Leg., ch. 76, § 5.43(a), eff. Sept. 1, 
1995;  Acts 2001, 77th Leg., ch. 380, § 1, eff. Sept. 1, 2001;  
Acts 2001, 77th Leg., ch. 614, § 2, eff. Sept. 1, 2001;  Acts 
2003, 78th Leg., ch. 1275, § 2(86), eff. Sept. 1, 2003;  Acts 
2005, 79th Leg., ch. 728, § 11.122, eff. Sept. 1, 2005.

Last modified: August 11, 2007