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A BILL TO BE ENTITLED
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AN ACT
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relating to performance bonds for certain public improvements in |
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certain municipalities. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 212.073, Local Government Code, is |
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amended to read as follows: |
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Sec. 212.073. PERFORMANCE BOND; LETTER OF CREDIT. (a) |
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Except as provided by Subsection (b), the [The] developer must |
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execute a performance bond for the construction of the improvements |
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that are the subject of the contract under Section 212.071 to ensure |
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completion of the project. The bond must be executed by a corporate |
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surety in accordance with Chapter 2253, Government Code. The |
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amount of the bond must be for the contract price for the |
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improvements. The municipality may not require the developer to |
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include in the amount of the bond any other improvement related to |
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the development that the developer did not contract with the |
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municipality to construct under Section 212.071. |
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(b) The municipality and developer may agree that, instead |
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of a performance bond under Subsection (a), the developer may |
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submit to the municipality an irrevocable letter of credit in the |
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amount required under Subsection (a) for the bond. As part of the |
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agreement, the municipality may not pay any amount to the |
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developer, issue a building permit related to the development other |
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than a permit necessary for the improvements that are the subject of |
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the contract, or approve a subdivision plat for the developer |
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until: |
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(1) the improvements are: |
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(A) complete; or |
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(B) in the final phase of construction if the |
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improvements are constructed in phases; and |
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(2) the developer has submitted to the municipality an |
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affidavit stating that the developer has paid all costs associated |
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with the construction. |
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SECTION 2. Section 212.073, Local Government Code, as |
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amended by this Act, applies only to a contract entered into under |
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Section 212.071, Local Government Code, on or after the effective |
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date of this Act. A contract entered into under Section 212.071, |
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Local Government Code, before the effective date of this Act is |
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governed by the law applicable to the contract immediately before |
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the effective date of this Act, and that law is continued in effect |
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for that purpose. |
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SECTION 3. This Act takes effect on the 91st day after the |
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last day of the legislative session. |