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A BILL TO BE ENTITLED
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AN ACT
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relating to limitations on the use of workers' compensation |
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insurance experience modifier values in soliciting and awarding |
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public and private construction contracts. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. The heading to Section 272.001, Business & |
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Commerce Code, is amended to read as follows: |
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Sec. 272.001. VOIDABLE CONTRACT PROVISION: CHOICE OF LAW. |
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SECTION 2. Section 272.002, Business & Commerce Code, is |
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amended to read as follows: |
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Sec. 272.002. INAPPLICABILITY [OF CHAPTER]. Section |
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272.001 [This chapter] does not apply to a construction contract |
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that: |
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(1) is a partnership agreement or other agreement |
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governing an entity or trust; |
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(2) provides for a loan or other extension of credit |
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and the party promising to perform the work that is the subject of |
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the construction contract is doing so as part of the party's |
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agreements with the lender or other person who extends credit; or |
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(3) is for the management of real property or |
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improvements and the obligation to perform the work that is the |
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subject of the construction contract is part of that management. |
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SECTION 3. Chapter 272, Business & Commerce Code, is |
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amended by adding Section 272.003 to read as follows: |
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Sec. 272.003. VOIDABLE CONTRACT PROVISION: EXPERIENCE |
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MODIFIER. (a) In this section: |
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(1) "Contract solicitation" means a request for bids, |
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proposals, qualifications, offers, or other responses from |
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potential contractors under a construction contract. |
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(2) "Experience modifier" and "governmental entity" |
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have the meanings assigned by Section 2252.909, Government Code. |
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(b) This section does not apply to a governmental entity. |
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(c) With respect to a construction contract: |
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(1) an offer to contract may not contain a term |
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requiring a person to have a specified experience modifier in order |
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to accept the offer; and |
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(2) a contract solicitation may not require a person |
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to have a specified experience modifier in order to submit a |
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response to the contract solicitation. |
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(d) A construction contract or an agreement collateral to or |
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affecting a construction contract may not require the contractor to |
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have a specified experience modifier. |
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(e) A contract solicitation, an offer, a construction |
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contract, or an agreement collateral to or affecting a construction |
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contract that violates Subsection (c) or (d) is voidable as against |
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public policy. |
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SECTION 4. Subchapter Z, Chapter 2252, Government Code, is |
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amended by adding Section 2252.909 to read as follows: |
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Sec. 2252.909. CONTRACT AWARD BASED ON EXPERIENCE MODIFIER |
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PROHIBITED. (a) In this section: |
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(1) "Contract" means: |
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(A) a construction contract, as defined by |
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Section 272.0001, Business & Commerce Code; or |
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(B) a contract for constructing, altering, or |
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repairing a public building or carrying out or completing any |
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public work. |
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(2) "Experience modifier" means a factor expressed as |
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a value that: |
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(A) is assigned to an employer seeking to |
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purchase a workers' compensation insurance policy in this state; |
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(B) affects the premium amount for the policy; |
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and |
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(C) is based on the employer's past and |
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prospective loss cost experience. |
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(3) "Governmental entity" means: |
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(A) a department, commission, board, office, or |
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other agency in the executive branch of state government created by |
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the state constitution or a state statute, including an institution |
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of higher education as defined by Section 61.003, Education Code; |
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or |
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(B) a political subdivision of this state, |
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including a municipality, county, or special purpose district. |
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(b) Notwithstanding any other law, a governmental entity |
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may not: |
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(1) request or require an offeror to include an |
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experience modifier in a bid, proposal, qualification, offer, or |
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other response submitted as part of the selection process for the |
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award of a contract; or |
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(2) consider an experience modifier in the process of |
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awarding a contract, including the: |
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(A) evaluation of bids, proposals, |
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qualifications, offers, or other responses; or |
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(B) selection of an offeror. |
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(c) A contract entered into in violation of Subsection (b) |
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is void as against public policy. |
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SECTION 5. The changes in law made by this Act to Chapter |
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272, Business & Commerce Code, apply only to a contract |
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solicitation or an offer to contract first issued on or after the |
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effective date of this Act or a contract, or agreement collateral to |
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or affecting a contract, entered into on or after the effective date |
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of this Act. A contract solicitation or an offer to contract first |
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issued before the effective date of this Act or a contract, or |
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agreement collateral to or affecting a contract, entered into |
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before the effective date of this Act is governed by the law in |
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effect on the date the solicitation or offer was first issued or the |
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contract or agreement was entered into, and that law is continued in |
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effect for that purpose. |
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SECTION 6. Section 2252.909, Government Code, as added by |
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this Act, applies only to a contract for which a governmental entity |
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first advertises or otherwise solicits offers on or after the |
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effective date of this Act. A contract for which a governmental |
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entity first advertised or otherwise solicited offers before the |
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effective date of this Act is governed by the law in effect on the |
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date the governmental entity first advertised or otherwise |
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solicited offers, and that law is continued in effect for that |
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purpose. |
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SECTION 7. This Act takes effect September 1, 2023. |