The caption says the bill is about bid bonding requirements, but the operative text waives performance bonds, which are a different guarantee. The caption names one kind of bond and the body drops another.
Caption: bid bonding. Bill: drops performance bonds on jobs under 1% of the budget.
The bill lets a Texas city skip two usual protections on construction contracts worth less than one percent of the city's latest adopted budget: making sure the contractor carries workers' compensation insurance, and requiring the contractor to get a performance bond. It touches cities, the contractors they hire, and the workers on those job sites. A project counts as all work at one location within 12 months, so on smaller city jobs, crews may work without required workers' comp coverage and the city may have no bond to fall back on if the contractor fails to finish, starting with contracts signed on or after September 1, 2025.
Labels
Labels: ZOMBIE BILL. Died 2 times: 88R HB 3406 (Died in committee) and this bill (Did not pass). Checked against 88R only.BACK FROM THE DEAD. Same text as a bill filed before that died: 88R HB 3406 (Died in committee). Filed in 2 sessions, counting this one. Checked against 88R only.TRY NO. 2. Filed in 2 sessions: 88R and 89R. Checked against 88R only.STALLED AFTER COMMITTEE. Voted out of the House Trade, Workforce & Economic Development committee 7-1 on May 2, 2025. Placed on the General State Calendar on May 14, 2025. The bill died.
relating to workers' compensation insurance coverage and bid
bonding requirements for small municipal construction projects.
WHAT IT DOES
Caption: bid bonding. Bill: drops performance bonds on jobs under 1% of the budget.
The bill lets a Texas city skip two usual protections on construction contracts worth less than one percent of the city's latest adopted budget: making sure the contractor carries workers' compensation insurance, and requiring the contractor to get a performance bond. It touches cities, the contractors they hire, and the workers on those job sites. A project counts as all work at one location within 12 months, so on smaller city jobs, crews may work without required workers' comp coverage and the city may have no bond to fall back on if the contractor fails to finish, starting with contracts signed on or after September 1, 2025.
The caption says the bill is about bid bonding requirements, but the operative text waives performance bonds, which are a different guarantee. The caption names one kind of bond and the body drops another.
TOTAL
No fiscal implication to the State is anticipated.
89R3264 SCL-D
By: Spiller
H.B. No. 875
A BILL TO BE ENTITLED
AN ACT
relating to workers' compensation insurance coverage and bid
bonding requirements for small municipal construction projects.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter Z, Chapter 271, Local Government
Code, is amended by adding Section 271.909 to read as follows:
Sec. 271.909. WORKERS' COMPENSATION AND BID BONDING
REQUIREMENTS FOR SMALL MUNICIPAL CONSTRUCTION PROJECTS. (a) In
this section, "project" includes all work to be completed on a
construction project for a municipality at one location within 12
months of the date the work begins.
(b) Notwithstanding any other law, for a construction
project contracted for an amount that is less than one percent of
the total amount of a municipality's most recently adopted budget,
the municipality is not required to:
(1) ensure that the contractor is covered by workers'
compensation insurance coverage; or
(2) require the contractor to obtain a performance
bond.
(c) For the purpose of determining the contracted amount of
a construction project under Subsection (b), a municipality may not
aggregate work from more than one project.
SECTION 2. The change in law made by this Act applies only
to a contract entered into on or after the effective date of this
Act.
SECTION 3. This Act takes effect September 1, 2025.