2005 Texas Government Code CHAPTER 2252. CONTRACTS WITH GOVERNMENTAL ENTITY

GOVERNMENT CODE

CHAPTER 2252. CONTRACTS WITH GOVERNMENTAL ENTITY

SUBCHAPTER A. NONRESIDENT BIDDERS


	§ 2252.001. DEFINITIONS.  In this subchapter:                               
		(1)  "Governmental contract" means a contract awarded 
by a governmental entity for general construction, an improvement, 
a service, or a public works project or for a purchase of supplies, 
materials, or equipment.
		(2)  "Governmental entity" means:                                             
			(A)  the state;                                                              
			(B)  a municipality, county, public school 
district, or special-purpose district or authority;
			(C)  a district, county, or justice of the peace 
court;                    
			(D)  a board, commission, department, office, or 
other agency in the executive branch of state government, including 
an institution of higher education as defined by Section 61.003, 
Education Code;
			(E)  the legislature or a legislative agency;  or                            
			(F)  the Supreme Court of Texas, the Texas Court 
of Criminal Appeals, a court of appeals, or the State Bar of Texas 
or another judicial agency having statewide jurisdiction.
		(3)  "Nonresident bidder" refers to a person who is not 
a resident.         
		(4)  "Resident bidder" refers to a person whose 
principal place of business is in this state, including a 
contractor whose ultimate parent company or majority owner has its 
principal place of business in this state.

Added by Acts 1993, 73rd Leg., ch. 268, § 1, eff. Sept. 1, 1993.           


	§ 2252.002. AWARD OF CONTRACT TO NONRESIDENT BIDDER.  A 
governmental entity may not award a governmental contract to a 
nonresident bidder unless the nonresident underbids the lowest bid 
submitted by a responsible resident bidder by an amount that is not 
less than the amount by which a resident bidder would be required to 
underbid the nonresident bidder to obtain a comparable contract in 
the state in which the nonresident's principal place of business is 
located.

Added by Acts 1993, 73rd Leg., ch. 268, § 1, eff. Sept. 1, 1993.           


	§ 2252.003. PUBLICATION OF OTHER STATES' LAWS ON 
CONTRACTS.  (a) The General Services Commission annually shall 
publish in the Texas Register:
		(1)  a list showing each state that regulates the award 
of a governmental contract to a bidder whose principal place of 
business is not located in that state;  and
		(2)  the citation to and a summary of each state's most 
recent law or regulation relating to the evaluation of a bid from 
and award of a contract to a bidder whose principal place of 
business is not located in that state.
	(b)  A governmental entity shall use the information 
published under this section to evaluate the bid of a nonresident 
bidder.  A governmental entity may rely on information published 
under this section to meet the requirements of Section 2252.002.

Added by Acts 1993, 73rd Leg., ch. 268, § 1, eff. Sept. 1, 1993.           


	§ 2252.004. CONTRACT INVOLVING FEDERAL FUNDS.  This 
subchapter does not apply to a contract involving federal funds.

Added by Acts 1993, 73rd Leg., ch. 268, § 1, eff. Sept. 1, 1993.  
Amended by Acts 2001, 77th Leg., ch. 1420, § 9.011, eff. Sept. 1, 
2001.

SUBCHAPTER B. INTEREST ON RETAINED PUBLIC WORKS CONTRACT PAYMENTS


	§ 2252.031. DEFINITIONS.  In this subchapter:                               
		(1)  "Governmental entity" means:                                             
			(A)  the state, a county, or a municipality;                                 
			(B)  a department, board, or agency of the state, 
a county, or a municipality;
			(C)  a school district or a subdivision of a 
school district;  or          
			(D)  any other governmental or quasi-governmental 
authority authorized by statute to make a public works contract.
		(2)  "Prime contractor" means a person or persons, 
firm, or corporation contracting with a governmental entity for a 
public work.
		(3)  "Public works" includes the construction, 
alteration, or repair of a public building or the construction or 
completion of a public work.
		(4)  "Public works contract payment" means a payment by 
a governmental entity for the value of labor, material, machinery, 
fixtures, tools, power, water, fuel, or lubricants used or 
consumed, ordered and delivered for use or consumption, or 
specially fabricated for use or consumption but not yet delivered, 
in the direct performance of a public works contract.
		(5)  "Retainage" means the part of a public works 
contract payment withheld by a governmental entity to secure 
performance of the contract.

Added by Acts 1993, 73rd Leg., ch. 268, § 1, eff. Sept. 1, 1993.           


	§ 2252.032. RETAINAGE.  A governmental entity shall:                        
		(1)  deposit in an interest-bearing account the 
retainage of a public works contract that provides for retainage of 
more than five percent of the periodic contract payment;  and
		(2)  pay the interest earned on the retainage to the 
prime contractor on completion of the contract.

Added by Acts 1993, 73rd Leg., ch. 268, § 1, eff. Sept. 1, 1993.           


	§ 2252.033. EXEMPTIONS.  This subchapter does not apply 
to:               
		(1)  a public works contract executed before August 31, 
1981;               
		(2)  a public works contract in which the total 
contract price estimate at the time of execution of the contract is 
less than $400,000;  or
		(3)  a public works contract made by the Texas 
Department of Transportation under Subchapter A, Chapter 223, 
Transportation Code.

Added by Acts 1993, 73rd Leg., ch. 268, § 1, eff. Sept. 1, 1993.  
Amended by Acts 1997, 75th Leg., ch. 165, § 30.201, eff. Sept. 1, 
1997;  Acts 2001, 77th Leg., ch. 1420, § 9.012, eff. Sept. 1, 
2001.

SUBCHAPTER C. PRIVATE AUXILIARY ENTERPRISE PROVIDING SERVICES TO 
STATE AGENCIES OR INSTITUTIONS OF HIGHER EDUCATION


	§ 2252.061. DEFINITIONS.  In this subchapter:                               
		(1)  "Auxiliary enterprise" means a business activity 
that is conducted at a state agency, provides a service to the 
agency, and is not paid for with appropriated money.
		(2)  "Contractor" means an individual, association, 
corporation, or other business entity that operates an auxiliary 
enterprise or performs a service of the auxiliary enterprise.
		(3)  "State agency" includes a state-supported 
institution of higher education.

Added by Acts 1993, 73rd Leg., ch. 268, § 1, eff. Sept. 1, 1993.           


	§ 2252.062. FINANCIAL STATEMENT.  A contractor must 
present at the time of contracting with a state agency a financial 
statement prepared by a certified public accountant.

Added by Acts 1993, 73rd Leg., ch. 268, § 1, eff. Sept. 1, 1993.           


	§ 2252.063. PAYMENT STATEMENT.  (a) A contractor must 
provide to the contracting state agency payment statements derived 
from sales tax reports.
	(b)  The contractor annually must provide the payment 
statements in accordance with the requirements of the state agency.
	(c)  A payment statement must be certified by a certified 
public accountant licensed in this state.

Added by Acts 1993, 73rd Leg., ch. 268, § 1, eff. Sept. 1, 1993.           


	§ 2252.064. PERFORMANCE BOND.  (a) A contractor shall 
execute a bond issued by a surety company authorized to do business 
in this state in an amount determined by the contracting state 
agency, but not to exceed the contract price.
	(b)  The bond must be payable to the state and conditioned on 
the faithful performance of the terms of the contract.

Added by Acts 1993, 73rd Leg., ch. 268, § 1, eff. Sept. 1, 1993.           

SUBCHAPTER D. REAL PROPERTY HELD IN TRUST


	§ 2252.091. DEFINITION.  In this subchapter, 
"governmental entity" means a state agency or a political 
subdivision of the state.

Added by Acts 1997, 75th Leg., ch. 1271, § 1, eff. Sept. 1, 1997.          


	§ 2252.092. IDENTIFICATION OF TRUST PROPERTY 
REQUIRED.  (a) A governmental entity may not purchase real property 
held in trust until the trustee submits to the governing body of the 
governmental entity a copy of the trust agreement identifying the 
true owner of the property.   The trustee shall identify the true 
owner of the property to a governmental entity.
	(b)  A governmental entity may not sell real property to a 
trustee until the governmental entity receives from the trustee a 
copy of the trust agreement identifying the person who will be the 
true owner of the property.  The trustee shall identify the person 
who will be the true owner of the property to the governmental 
entity.

Added by Acts 1995, 74th Leg., ch. 913, § 1, eff. Aug. 28, 1995.  
Redesignated from V.T.C.A., Local Government  Code § 280.002(a), 
(b) and amended by Acts 1997, 75th Leg., ch. 1271, § 1, eff. 
Sept. 1, 1997


	§ 2252.093. NONCOMPLIANCE CREATES VOID CONVEYANCE.  A 
conveyance of property subject to this subchapter is void if a 
governmental entity fails to comply with Section 2252.092.

Added by Acts 1995, 74th Leg., ch. 913, § 1, eff. Aug. 28, 1995.  
Redesignated from V.T.C.A., Local Government Code § 280.002(c) 
and amended by Acts 1997, 75th Leg., ch. 1271, § 1, eff. Sept. 1, 
1997.


	§ 2252.094. TRUST AGREEMENT CONFIDENTIAL.  A trust 
agreement submitted to the governing body of the governmental 
entity under this subchapter is confidential information excepted 
from the requirements of Section 552.021, Government Code.

Added by Acts 1995, 74th Leg., ch. 913, § 1, eff. Aug. 28, 1995.  
Redesignated from V.T.C.A., Local Government Code § 280.002(d) 
and amended by Acts 1997, 75th Leg., ch. 1271, § 1, eff. Sept. 1, 
1997.

SUBCHAPTER E. PUBLIC CONTRACTS WITH DISADVANTAGED OR HISTORICALLY 
UNDERUTILIZED BUSINESSES


	§ 2252.121. DEFINITIONS.  In this subchapter:                               
		(1)  "Contractor" means a person who submits a bid for a 
public contract.  The term includes a general contractor, a prime 
contractor, and a subcontractor.
		(2)  "Disadvantaged or historically underutilized 
business" means an entity that meets the definition of a 
historically underutilized business under Section 2161.001 and in 
which the owners of the business participate in the control, 
operation, and management of the business in a manner proportionate 
to their ownership so that the business is clearly controlled by the 
economically disadvantaged owners.
		(3)  "Governmental entity" means a state agency or 
political subdivision of this state.
		(4)  "Person" means an individual, partnership, 
association, corporation, or other private legal entity.
		(5)  "Political subdivision" means a county, 
municipality, school district, or other special district or 
authority of this state.
		(6)  "Public contract" means a purchasing contract or 
public works contract awarded by a governmental entity.
		(7)  "State agency" means a board, commission, office, 
department, or other agency in the executive, judicial, or 
legislative branch of state government.  The term includes an 
institution of higher education as defined by Section 61.003, 
Education Code.

Added by Acts 2001, 77th Leg., ch. 1420, § 9.013(a), eff. Sept. 
1, 2001. 


	§ 2252.122. APPLICABILITY.  This subchapter applies to 
each public contract entered into by a governmental entity and a 
contractor in which the contractor claims to be a disadvantaged or a 
historically underutilized business.

Added by Acts 2001, 77th Leg., ch. 1420, § 9.013(a), eff. Sept. 
1, 2001. 


	§ 2252.123. PROHIBITED ACT.  A contractor may not claim 
disadvantaged or historically underutilized business status in 
bidding on a public contract unless the contractor meets the 
definition of a disadvantaged or historically underutilized 
business and that contractor will personally execute the terms of 
the contract.

Added by Acts 2001, 77th Leg., ch. 1420, § 9.013(a), eff. Sept. 
1, 2001. 


	§ 2252.124. SPECIFIC REQUIREMENTS.  To qualify as a 
contractor claiming disadvantaged or historically underutilized 
business status under this subchapter:
		(1)  the general contractor will perform all of the 
estimating and contract administration functions with the 
employees of that contractor;
		(2)  subcontractors will perform all of their work of 
their trade with their own employees or, if the subcontractor uses 
an employee leasing firm for the purpose of providing salary and 
benefit administration, with employees who in all other respects 
are supervised and perform on the job as if they were employees of 
the subcontractor;  and
		(3)  a prime contractor who intends to subcontract 
specific trades may do so if:
			(A)  the dollar value of the subcontracts does not 
exceed 75 percent of the original value of the contract;  and
			(B)  all work in the trade of the prime contractor 
is accomplished by employees of that contractor or, if the prime 
contractor uses an employee leasing firm for the purpose of salary 
and benefit administration, with employees who in all other 
respects are supervised and perform on the job as if they were 
employees of the prime contractor.

Added by Acts 2001, 77th Leg., ch. 1420, § 9.013(a), eff. Sept. 
1, 2001. 


	§ 2252.125. CIVIL PENALTY.  (a) The attorney general or a 
district, county, or municipal attorney may institute an action in 
district court to recover a civil penalty against a person who 
claims disadvantaged or historically underutilized business status 
and a general contractor who knowingly contracts with a person 
claiming the disadvantaged or historically underutilized business 
status in violation of Section 2252.123.
	(b)  A civil penalty imposed under this section may not 
exceed $1,000 for each violation and may not exceed $100,000, in the 
aggregate, for all violations arising from a single action.  Each 
day a violation occurs constitutes a separate violation for 
purposes of imposing the penalty.
	(c)  A civil penalty recovered in an action brought by the 
attorney general shall be deposited in the state treasury.  A civil 
penalty recovered in an action brought by a political subdivision 
shall be deposited in the general fund of that political 
subdivision.
	(d)  A civil penalty imposed under this section is in 
addition to any other criminal, civil, or administrative penalty 
that may be imposed by the state or a political subdivision and to 
which a person in violation of Section 2252.123 may be liable.

Added by Acts 2001, 77th Leg., ch. 1420, § 9.013(a), eff. Sept. 
1, 2001. 

SUBCHAPTER Z. MISCELLANEOUS PROVISIONS


	§ 2252.901. CONTRACTS WITH FORMER OR RETIRED AGENCY 
EMPLOYEES.  (a) A state agency may not enter into an employment 
contract, a professional services contract under Chapter 2254, or a 
consulting services contract under Chapter 2254 with a former or 
retired employee of the agency before the first anniversary of the 
last date on which the individual was employed by the agency, if 
appropriated money will be used to make payments under the 
contract.  This section does not prohibit an agency from entering 
into a professional services contract with a corporation, firm, or 
other business entity that employs a former or retired employee of 
the agency within one year of the employee's leaving the agency, 
provided that the former or retired employee does not perform 
services on projects for the corporation, firm, or other business 
entity that the employee worked on while employed by the agency.
	(b)  and (c) Repealed by Acts 2001, 77th Leg., ch. 715, § 
3(3), eff. Sept. 1, 2001.
	(d)  In this section:                                                          
		(1)  "Employment contract" includes a personal 
services contract regardless of whether the performance of the 
contract involves the traditional relationship of employer and 
employee.  The term does not apply to an at-will employment 
relationship that involves the traditional relationship of 
employer and employee.
		(2)  "Retired agency employee" means a person:                                
			(A)  whose last state service before retirement 
was for the state agency with which the retiree contracts to perform 
services;  and
			(B)  who is a retiree of:                                                    
				(i)  the employee class of membership of the 
Employees Retirement System of Texas;  or
				(ii)  the Teacher Retirement System of 
Texas, the majority of whose service was credited in that system in 
a position with a state agency.
		(3)  "State agency" includes a "public senior college 
or university," as that term is defined by Section 61.003, 
Education Code.

Added by Acts 1997, 75th Leg., ch. 1306, § 2, eff. Sept. 1, 1998.  
Amended by Acts 1999, 76th Leg., ch. 1499, § 1.36, eff. Sept. 1, 
1999;  Acts 2001, 77th Leg., ch. 715, § 3(3), eff. Sept. 1, 2001.


	§ 2252.902. INDEMNITY PROVISIONS IN CONSTRUCTION 
CONTRACTS.  (a) In this section, "construction contract" means a 
contract or agreement made and entered into by a state governmental 
entity, contractor, construction manager, subcontractor, supplier, 
or equipment lessor, concerning the construction, alteration, or 
repair, of a state public building or carrying out or completing any 
state public work.
	(b)  Except as provided by Subsection (c), a covenant, 
promise, or agreement contained in a construction contract, or in 
an agreement collateral to or affecting a construction contract, is 
void and unenforceable to the extent that it indemnifies a person 
against all or any portion of loss or liability for damage that:
		(1)  is caused by or results from the sole, joint, or 
concurrent negligence of the indemnitee, its agent, employee, or 
another independent contractor directly responsible to the 
indemnitee;  and
		(2)  arises from:                                                             
			(A)  personal injury or death;                                               
			(B)  property damage;                                                        
			(C)  a fine, penalty, administrative action, or 
other action assessed by a governmental entity directly against the 
indemnitee, its agent or employee, or an independent contractor 
directly responsible to the indemnitee;  or
			(D)  any other loss, damage, or expense that 
arises from an occurrence described by Paragraph (A), (B), or (C).
	(c)  A covenant, promise, or agreement, contained in a 
construction contract, or in an agreement collateral to or 
affecting a construction contract, may provide for a person to 
indemnify, hold harmless, or defend another person against loss or 
liability for damage that is caused by or results from the sole, 
joint, or concurrent negligence of the indemnitee or its agent or 
employee and arises from the bodily injury or death of an employee 
of:
		(1)  the indemnitor;                                                          
		(2)  the indemnitor's subcontractor, supplier, or 
equipment lessor;         
		(3)  any lower-tier subcontractor, supplier, or 
equipment lessor of the indemnitor's subcontractor;  or
		(4)  any independent contractor directly responsible 
to a person described in Subdivisions (1)-(3).
	(d)  This chapter does not affect the validity and 
enforceability of:        
		(1)  an insurance contract;                                                   
		(2)  benefits and protections under the workers' 
compensation laws of this state;  or
		(3)  any statutory right of contribution.                                     
	(e)  This section may not be waived by contract or otherwise.                  

Added by Acts 2001, 77th Leg., ch. 1422, § 14.17, eff. Sept. 1, 
2001.  Amended by Acts 2005, 79th Leg., ch. 728, § 8.020, eff. 
Sept. 1, 2005.


	§ 2252.903. CONTRACTING WITH PERSONS WHO HAVE CERTAIN 
DEBTS OR DELINQUENCIES.  (a) Each state agency shall determine 
whether a payment law prohibits the comptroller from issuing a 
warrant or initiating an electronic funds transfer to a person 
before the agency enters into a written contract with that person.  
The agency shall make this determination not earlier than the 
seventh day before and not later than the date of entering into the 
contract.  The determination must be made in accordance with the 
comptroller's requirements.
	(b)  This subsection applies if the agency determines that a 
payment law prohibits the comptroller from issuing a warrant or 
initiating an electronic funds transfer to the person.  The agency 
may not enter into a written contract with the person unless:
		(1)  the contract requires the agency's payments under 
the contract to be applied directly toward eliminating the person's 
debt or delinquency;  and
		(2)  the requirement described in Subdivision (1) 
specifically applies to any debt or delinquency, regardless of when 
it arises.
	(c)  The comptroller may determine the order in which a 
person's multiple types of debts or delinquencies are reduced or 
eliminated under this section.
	(d)  The comptroller may adopt rules and establish 
procedures to administer this section.
	(e)  In this section:                                                          
		(1)  "Debt or delinquency" means a debt, tax 
delinquency, student loan delinquency, or child support 
delinquency that results in a payment law prohibiting the 
comptroller from issuing a warrant or initiating an electronic 
funds transfer.
		(2)  "Payment law" means:                                                     
			(A)  Section 57.48, Education Code;                                          
			(B)  Section 231.007, Family Code;                                           
			(C)  Section 403.055;  or                                                    
			(D)  any similar law that prohibits the 
comptroller from issuing a warrant or initiating an electronic 
funds transfer to a person.
		(3)  "State agency" has the meaning assigned by Section 
403.055.            
		(4)  "Written contract" does not include a contract the 
payments for which must be made through the comptroller's issuance 
of warrants or initiation of electronic funds transfers under 
Section 404.046, 404.069, or 2103.003.

Added by Acts 2001, 77th Leg., ch. 1158, § 71, eff. June 15, 
2001.  Amended by Acts 2003, 78th Leg., ch. 1310, § 62, eff. 
Sept. 1, 2003.