Sec. 370.308. PERFORMANCE AND PAYMENT SECURITY. (a) Notwithstanding Section 223.006 and the requirements of Subchapter B, Chapter 2253, Government Code, an authority shall require a private entity entering into a comprehensive development agreement under Section 370.305 to provide a performance and payment bond or an alternative form of security in an amount sufficient to:
(1) ensure the proper performance of the agreement; and
(2) protect:
(A) the authority; and
(B) payment bond beneficiaries who have a direct contractual relationship with the private entity or a subcontractor of the private entity to supply labor or material.
(b) A performance and payment bond or alternative form of security shall be in an amount equal to the cost of constructing or maintaining the project.
(c) If an authority determines that it is impracticable for a private entity to provide security in the amount described by Subsection (b), the authority shall set the amount of the bonds or the alternative forms of security.
(d) A payment or performance bond or alternative form of security is not required for the portion of an agreement that includes only design or planning services, the performance of preliminary studies, or the acquisition of real property.
(e) The amount of the payment security must not be less than the amount of the performance security.
(f) In addition to performance and payment bonds, an authority may require the following alternative forms of security:
(1) a cashier's check drawn on a financial entity specified by the authority;
(2) a United States bond or note;
(3) an irrevocable bank letter of credit; or
(4) any other form of security determined suitable by the authority.
(g) An authority by rule shall prescribe requirements for alternative forms of security provided under this section.
Added by Acts 2003, 78th Leg., ch. 1325, Sec. 2.01, eff. June 21, 2003.
Section: Previous 370.301 370.302 370.303 370.304 370.305 370.306 370.307 370.308 370.309 370.310 370.311 370.312 370.313 370.315 370.317 NextLast modified: September 28, 2016