Bill Text: TX SB1980 | 2017-2018 | 85th Legislature | Engrossed

---

Bill Title: Relating to performance bonds for certain public improvements in certain municipalities.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Engrossed - Dead) 2017-05-16 - Referred to Business & Industry [SB1980 Detail]

Download: Texas-2017-SB1980-Engrossed.html

---

By: Schwertner S.B. No. 1980

A BILL TO BE ENTITLED
AN ACT
relating to performance bonds for certain public improvements in
certain municipalities.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 212.073, Local Government Code, is
amended to read as follows:
Sec. 212.073. PERFORMANCE BOND; LETTER OF CREDIT.
(a) Except as provided by Subsection (b), the [The] developer must
execute a performance bond for the construction of the improvements
that are the subject of the contract under Section 212.071 to ensure
completion of the project. The bond must be executed by a corporate
surety in accordance with Chapter 2253, Government Code. The
amount of the bond must be for the contract price for the
improvements. The municipality may not require the developer to
include in the amount of the bond any other improvement related to
the development that the developer did not contract with the
municipality to construct under Section 212.071.
(b) The municipality and developer may agree that, instead
of a performance bond under Subsection (a), the developer may
submit to the municipality an irrevocable letter of credit in the
amount required under Subsection (a) for the bond. As part of the
agreement, the municipality may not pay any amount to the
developer, issue a building permit related to the development other
than a permit necessary for the improvements that are the subject of
the contract, or approve a subdivision plat for the developer
until:
(1) the improvements are:
(A) complete; or
(B) in the final phase of construction if the
improvements are constructed in phases; and
(2) the developer has submitted to the municipality an
affidavit stating that the developer has paid all costs associated
with the construction.
SECTION 2. Section 212.073, Local Government Code, as
amended by this Act, applies only to a contract entered into under
Section 212.071, Local Government Code, on or after the effective
date of this Act. A contract entered into under Section 212.071,
Local Government Code, before the effective date of this Act is
governed by the law applicable to the contract immediately before
the effective date of this Act, and that law is continued in effect
for that purpose.
SECTION 3. This Act takes effect September 1, 2017.