Bill > HB5435

This bill modifies lease requirements for public property leased to nongovernmental entities by mandating specific lease terms. Under the new provisions, leases must require contractors to execute two types of bonds when performing construction, alteration, or repair work on leased property: a payment bond (protecting subcontractors and suppliers) and a performance bond equal to the contract amount (ensuring faithful contract completion). Additionally, lessees must provide a notice of commencement to the governmental entity at least 90 days before starting any improvement work. An important exception is created for leases involving institutions of higher education, which are exempt from the 90-day notice requirement. The changes will only apply to leases entered into on or after the bill's effective date of September 1, 2025, meaning existing leases are not immediately impacted. This legislation aims to provide greater financial protection and transparency for governmental entities when leasing public property to private parties by ensuring proper bonding and advance notification of construction projects.