Texas Government Code Chapter 2253 (McGregor Act)

Texas Government Code Chapter 2253 is the statute that requires performance and payment bonds on Texas public-works construction contracts. Historically called the "McGregor Act," it sits in Title 10, Subtitle F of the Government Code and was recodified in its current form by Acts 1993, 73rd Legislature, Chapter 268, effective September 1, 1993. Chapter 2253 functions as the Texas "Little Miller Act" - the state-level counterpart to the federal Miller Act that governs federal construction projects.

Section 2253.021 requires a payment bond when the public work contract exceeds $25,000 (or exceeds $50,000 if the governmental entity is a municipality or a joint board created under Subchapter D, Chapter 22, Transportation Code), and a performance bond when the contract exceeds $100,000. Both bonds must be furnished by the prime contractor before beginning work and are written in the full amount of the prime contract.

The statute is widely known as the McGregor Act after the legislator associated with the original 20th-century legislation that became the modern public-work bond law for Texas. The substantive McGregor Act provisions were folded into Government Code Chapter 2253 during the 1993 recodification. Texas courts continue to reference the McGregor Act in opinions interpreting modern Chapter 2253, so the names are used interchangeably in practice.

Payment bond beneficiaries are parties with a direct contractual relationship with either the prime contractor or a subcontractor that supplies public-work labor or material. That includes first-tier subs and suppliers contracting directly with the prime, plus second-tier subs and suppliers contracting with a first-tier sub. Third-tier and lower claimants are generally not protected, similar to the federal Miller Act tier limits.

Section 2253.078 sets a one-year statute of limitations: a suit on a payment bond may not be brought after the first anniversary of the date the claim notice was mailed under Chapter 2253. Missing the one-year window typically bars the claim, even if the notice itself was timely and the underlying debt is undisputed.

The Miller Act (40 U.S.C. 3131-3134) applies to federal construction contracts exceeding $150,000 and requires bonds equal to 100% of the contract price. Chapter 2253 applies to Texas state and local public-work contracts with lower thresholds ($25,000 / $100,000) and different notice rules - including the 15th-day-of-the-second-month notice for indirect claimants. Both statutes substitute bond claims for mechanic's liens, because liens generally cannot attach to public property. See our Miller Act guide for federal-project rules.

Chapter 2253 sets the floor, not the ceiling. A governmental entity is free to require bonding on contracts below the $25,000 or $100,000 thresholds as a matter of procurement policy, and many do for risk control. Even when bonding is not statutorily required, owners often insist on a performance bond to protect against contractor default and a payment bond to insulate the project from downstream payment disputes.

When a governmental entity fails to require the statutorily mandated payment bond, Texas case law has generally allowed unpaid subcontractors and suppliers to pursue alternative remedies, including direct claims against the governmental entity in limited circumstances. The exact remedy depends on the entity, the dollar value, and the facts. This is a fact-specific area - claimants in that posture should consult a Texas construction-law attorney immediately because Chapter 2253 deadlines can still affect the timing of available alternatives.