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House Bill 1513 |
House Author: Smith, Wayne |
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Effective: 9-1-09 |
Senate Sponsor: Jackson, Mike |
House Bill 1513 amends Property Code provisions relating to construction contract trust funds to specify that a fee payable to a contractor is not considered trust funds if, in addition to other criteria, the fee is earned as provided by the contract between the contractor and the property owner and, as an alternative to being paid to the contractor, is disbursed from a construction account. The bill specifies that trust funds paid to a creditor under provisions relating to construction payments, loan receipts, and the misapplication of trust funds are not property or an interest in property of a debtor who is a trustee of the trust funds and specifies that such provisions apply to a public or private contract for the improvement of specific real property in Texas, regardless of whether the contract is covered by a statutory or common law payment bond. The bill establishes that a property owner is a beneficiary of trust funds in connection with a residential construction contract and specifies that a trustee who commingles trust funds with other funds in the trustee's possession does not defeat a trust created under those provisions for construction payments, loan receipts, and the misapplication of trust funds.