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A BILL TO BE ENTITLED
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AN ACT
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relating to a contractor's or subcontractor's right to elect not to |
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proceed with additional work under a contract. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subchapter D, Chapter 2251, Government Code, is |
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amended by adding Section 2251.0521 to read as follows: |
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Sec. 2251.0521. UNSIGNED CHANGE ORDER. (a) In this |
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section: |
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(1) "Public work contract" has the meaning assigned by |
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Section 2253.001. |
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(2) "Subcontract" means a contract between a |
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subcontractor and a vendor who is providing services under a public |
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work contract. |
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(b) A vendor may elect not to proceed with additional work |
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directed by a governmental entity under a public work contract if: |
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(1) the vendor has not received a written, fully |
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executed change order for the governmental entity-directed |
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additional work; and |
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(2) the aggregate actual or anticipated value of the |
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additional work under the vendor's contract terms plus any previous |
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governmental entity-directed additional work for which the vendor |
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has not received a written, fully executed change order exceeds 10 |
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percent of the vendor's original public work contract amount. |
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(c) A subcontractor may elect not to proceed with additional |
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work directed by a vendor under a subcontract if: |
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(1) the subcontractor has not received a written, |
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fully executed change order for the governmental entity-directed |
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additional work from the vendor; and |
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(2) the aggregate actual or anticipated value of the |
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additional work under the subcontractor's subcontract terms plus |
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any previous governmental entity-directed additional work for |
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which the subcontractor has not received a written, fully executed |
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change order exceeds 10 percent of the subcontractor's subcontract |
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amount. |
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(d) A vendor or subcontractor who elects not to proceed with |
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additional work as provided by this section is not responsible for |
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damages associated with the election not to proceed. |
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SECTION 2. Chapter 28, Property Code, is amended by adding |
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Section 28.0091 to read as follows: |
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Sec. 28.0091. UNSIGNED CHANGE ORDER. (a) A contractor or |
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subcontractor may elect not to proceed with additional work |
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directed by an owner if: |
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(1) the contractor or subcontractor has not received a |
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written, fully executed change order for the owner-directed |
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additional work; and |
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(2) the aggregate actual or anticipated value of the |
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additional work plus any previous owner-directed additional work |
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for which the contractor or subcontractor has not received a |
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written, fully executed change order exceeds 10 percent of the |
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contractor's or subcontractor's original contract amount. |
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(b) A contractor or subcontractor who elects not to proceed |
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with additional work as provided by this section is not responsible |
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for damages associated with the election not to proceed. |
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SECTION 3. Section 2251.0521, Government Code, and Section |
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28.0091, Property Code, as added by this Act, apply only to a |
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contract entered into on or after the effective date of this Act. |
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SECTION 4. This Act takes effect September 1, 2023. |