Relating to required lease terms for public property leased to a nongovernmental entity, the official text

H.B. No. 5435

AN ACT

relating to required lease terms for public property leased to a

nongovernmental entity.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 2252.909, Government Code, as added by

Chapter 1008 (H.B. 2518), Acts of the 88th Legislature, Regular

Session, 2023, is amended by amending Subsection (b) and adding

Subsection (b-1) to read as follows:

(b) Except as provided by Subsection (b-1), a [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.

(b-1) The requirement that a lease must contain a term

requiring notice of commencement to a governmental entity under

Subsection (b)(2) does not apply to a lease between an institution

of higher education, as defined by Section 61.003, Education Code,

and another person regarding public property.

SECTION 2. The change in law made by this Act applies only

to a lease between a governmental entity and another person

regarding public property that is entered into on or after the

effective date of this Act.

SECTION 3. This Act takes effect September 1, 2025.

______________________________
______________________________

President of the Senate
Speaker of the House

I certify that H.B. No. 5435 was passed by the House on May 8,

2025, by the following vote: Yeas 145, Nays 1, 2 present, not

voting.

______________________________

Chief Clerk of the House

I certify that H.B. No. 5435 was passed by the Senate on May

28, 2025, by the following vote: Yeas 31, Nays 0.

______________________________

Secretary of the Senate

APPROVED: _____________________

Date

_____________________

Governor