(a) Before bringing an action asserting a claim to which this chapter applies, the governmental entity must allow each party with whom the governmental entity has a contract for the design or construction of an affected structure and who is subject to the claim and any known subcontractor or supplier who is subject to the claim:
(1) a reasonable opportunity to inspect any construction defect or related condition identified in the report for a period of 30 days after sending the report required by Section 2272.003; and
(2) at least 120 days after the inspection to:
(A) correct any construction defect or related condition identified in the report; or
(B) enter into a separate agreement with the governmental entity to correct any construction defect or related condition identified in the report.
(b) The governmental entity is not required to allow a party to make a correction or repair under Subsection (a) if:
(1) the party:
(A) is a contractor and cannot provide payment and performance bonds to cover the corrective work;
(B) cannot provide liability insurance or workers' compensation insurance;
(C) has been previously terminated for cause by the governmental entity; or
(D) has been convicted of a felony; or
(2) the governmental entity previously complied with the process required by Subsection (a) regarding a construction defect or related condition identified in the report and:
(A) the defect or condition was not corrected as required by Subsection (a)(2)(A) or an agreement under Subsection (a)(2)(B); or
(B) the attempt to correct the construction defect or related condition identified in the report resulted in a new construction defect or related condition.