H.B. No. 2518

	AN ACT
	relating to required lease terms for public property leased to a
	nongovernmental entity; creating a criminal offense.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  Subchapter Z, Chapter 2252, Government Code, is
	amended by adding Section 2252.909 to read as follows:
	Sec. 2252.909.  REQUIRED LEASE TERMS FOR LEASE OF PUBLIC
	PROPERTY. (a) In this section, "governmental entity" has the
	meaning assigned by Section 2253.001.
	(b)  A lease between a governmental entity and another person
	regarding public property must contain lease terms requiring the
	person to:
	(1)  include in each contract for the construction,
	alteration, or repair of an improvement to the leased property a
	condition that the contractor:
	(A)  execute a payment bond that conforms to
	Subchapter I, Chapter 53, Property Code; and
	(B)  execute a performance bond in an amount equal
	to the amount of the contract for the protection of the governmental
	entity and conditioned on the faithful performance of the
	contractor's work in accordance with the plans, specifications, and
	contract documents; and
	(2)  provide to the governmental entity a notice of
	commencement consistent with this section at least 90 days before
	the date the construction, alteration, or repair of any improvement
	to the leased property begins.
	(c)  A notice of commencement under Subsection (b) must:
	(1)  identify the public property where the work will
	be performed;
	(2)  describe the work to be performed;
	(3)  state the total cost of the work to be performed;
	(4)  include copies of the performance and payment
	bonds required under Subsection (b); and
	(5)  include a written acknowledgment signed by the
	contractor stating that copies of the required performance and
	payment bonds will be provided to all subcontractors not later than
	the fifth day after the date a subcontract is executed.
	(d)  On or before the 10th day after the date a governmental
	entity receives a notice of commencement for the construction,
	alteration, or repair of an improvement to leased property required
	under Subsection (b)(2), the governmental entity may notify the
	leaseholder that the construction, alteration, or repair may not
	proceed.
	(e)  A person commits an offense if the person materially
	misrepresents information in a notice of commencement. An offense
	under this subsection is a Class A misdemeanor.
	SECTION 2.  Section 2253.027, Government Code, is amended by
	amending Subsection (a) and adding Subsection (c) to read as
	follows:
	(a)  If a governmental entity fails to obtain from a prime
	contractor a payment bond as required by Section 2253.021 or fails
	to include in a lease the lease terms required by Section 2252.909:
	(1)  the entity is subject to the same liability that a
	surety would have if the surety had issued a payment bond and if the
	entity had obtained the bond; and
	(2)  a payment bond beneficiary is entitled to a lien on
	money due to the prime contractor in the same manner and to the same
	extent as if the public work contract were subject to Subchapter J,
	Chapter 53, Property Code.
	(c)  A governmental entity is not liable as a surety under
	Subsection (a)(1) if a person leasing property from the entity
	fails to submit to the entity the notice of commencement required by
	Section 2252.909.
	SECTION 3.  The changes in law made by this Act apply only to
	a lease for public property entered into or renewed by a
	governmental entity on or after the effective date of this Act.
	SECTION 4.  This Act takes effect September 1, 2023.
	______________________________	______________________________
	President of the Senate	Speaker of the House
	I certify that H.B. No. 2518 was passed by the House on April
	27, 2023, by the following vote:  Yeas 147, Nays 0, 1 present, not
	voting.
	______________________________
	Chief Clerk of the House
	I certify that H.B. No. 2518 was passed by the Senate on May
	16, 2023, by the following vote:  Yeas 31, Nays 0.
	______________________________
	Secretary of the Senate
	APPROVED:  _____________________
	Date
	_____________________
	Governor