HBA-AMW C.S.H.B. 409 77(R)BILL ANALYSIS


Office of House Bill AnalysisC.S.H.B. 409
By: Shields
State Affairs
3/30/2001
Committee Report (Substituted)



BACKGROUND AND PURPOSE 

Current law does not require that a bondsman's name, address, and telephone
number appear on a payment or performance bond.  As a result, it may be
difficult to locate the bondsman to obtain payment on a government or
private bond.  C.S.H.B. 409 requires that performance and payment bonds
clearly display surety company contact information for sending any notice
of claim, or display the toll-free telephone number maintained by the Texas
Department of Insurance for obtaining the address of a surety company. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

ANALYSIS

C.S.H.B. 409 amends the Government and Property codes relating to bonds
executed by a contractor for a public work or to indemnify against a
mechanic's, contractor's, or materialman's lien.  The bill requires that
certain surety company contact information and the Texas Department of
Insurance's toll-free telephone number be contained on the bond or an
attachment to the bond. The bill requires a governmental entity to furnish
to any person who makes the appropriate request a certified copy of a
payment bond, and any attachment to the bond, the public work contract for
which the bond was given, and the toll-free telephone number maintained by
the department for obtaining information concerning licensed insurance
companies. 

EFFECTIVE DATE

September 1, 2001.

COMPARISON OF ORIGINAL TO SUBSTITUTE

C.S.H.B. 409 differs from the original to provide that contact information
can be displayed on an attachment to the bond, in addition to the face of
the bond.  The substitute also provides that the Texas Department of
Insurance's toll-free telephone number may be placed on the bond or
attachment to the bond for a claimant to obtain the surety company's
contact information.  The substitute addresses bonds executed by a
contractor to indemnify against a mechanic's, contractor's, or
materialman's lien, whereas the original only addressed liens executed for
public work.