Enrolled Bill Summary

House Bill 2397 adds a Government Code subchapter to establish rights and remedies for vendors and subcontractors who do not receive prompt payment of undisputed amounts under a contract with a governmental entity. The rights and remedies, however, are not exclusive of those available under other law. The bill allows a vendor to suspend work on giving the governmental entity written notice of the entity's nonpayment and the vendor's intent to suspend. It gives a subcontractor with a vendor the right to suspend work, with similar prior notice to the vendor, if either the governmental entity has not paid the vendor or the vendor has not paid the subcontractor. The bill establishes the earliest dates, subsequent to the notice, at which suspension may occur. It includes procedures that apply if, between the notice and the intended suspension, there is counter-notice that payment has been made or that the governmental entity contends that a bona fide dispute exists. Other bill provisions, applicable to the entire chapter, state that rights and remedies relating to governmental payment for goods and services may not be waived and that any purported waiver is void.