TERMINATION OF CONTRACT FOR NONCOMPLIANCE

(a) Subject to Subsection (c), a governmental body may terminate a contract described by Section 552.371 if: (1) the governmental body provides notice under Section 552.373 to the entity that is party to the contract; (2) the contracting entity does not cure the violation in the period prescribed by Section 552.373; (3) the governmental body determines that the contracting entity has intentionally or knowingly failed to comply with a requirement of this subchapter; and (4) the governmental body determines that the entity has not taken adequate steps to ensure future compliance with the requirements of this subchapter. (b) For the purpose of Subsection (a), an entity has taken adequate steps to ensure future compliance with this subchapter if: (1) the entity produces contracting information requested by the governmental body that is in the custody or possession of the entity not later than the 10th business day after the date the governmental body makes the request; and (2) the entity establishes a records management program to enable the entity to comply with this subchapter. (c) A governmental body may not terminate a contract under this section if the contract is related to the purchase or underwriting of a public security, the contract is or may be used as collateral on a loan, or the contract's proceeds are used to pay debt service of a public security or loan.