H.B. No. 560
1-1 AN ACT
1-2 relating to the payment of certain laborers, workers, and mechanics
1-3 under public works contracts.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 2, Chapter 45, General Laws, Acts of the
1-6 43rd Legislature, Regular Session, 1933 (Article 5159a, Vernon's
1-7 Texas Civil Statutes), is amended as follows:
1-8 Sec. 2. (a) The public body awarding any contract for
1-9 public work on behalf of the State, or on behalf of any county,
1-10 city and county, city, town, district or other political
1-11 subdivision thereof, or otherwise undertaking any public work,
1-12 shall ascertain the general prevailing rate of per diem wages in
1-13 the locality in which the work is to be performed for each craft or
1-14 type of workman or mechanic needed to execute the contract, and
1-15 shall specify in the call for bids for said contract, and in the
1-16 contract itself, what the general prevailing rate of per diem wages
1-17 in the said locality is for each craft or type of workman needed to
1-18 execute the contract, also the prevailing rate for legal holiday
1-19 and overtime work, and it shall be mandatory upon the contractor to
1-20 whom the contract is awarded, and upon any subcontractor under him,
1-21 to pay not less than the said specified rates to all laborers,
1-22 workmen and mechanics employed by them in the execution of the
1-23 contract. Failure of the awarding body to ascertain and specify in
1-24 the call for the contract the prevailing wage rate in that locality
2-1 relieves the contractor or subcontractor from liability under this
2-2 Act. To ascertain the general prevailing wage rate, the public
2-3 body shall either conduct a survey to determine the prevailing wage
2-4 based upon the wages received by classes of laborers and mechanics
2-5 employed on projects of a character similar to the contract work in
2-6 the city, county or other political subdivision of the State in
2-7 which the work is to be performed, or adopt the prevailing wage
2-8 rate as determined by the U.S. Department of Labor in accordance
2-9 with the Davis-Bacon Act, if the survey on which the Davis-Bacon
2-10 rate was founded was conducted within three years prior to the
2-11 bidding of the project.
2-12 (b) A contractor or subcontractor in violation of this Act
2-13 is liable for <The contractor shall forfeit as> a penalty. That
2-14 contractor or subcontractor shall pay to the State, county, or city
2-15 with more than 10,000 residents <city and county, city, town>,
2-16 district or other political subdivision on whose behalf the
2-17 contract is made or awarded, Sixty Dollars ($60.00) <Ten Dollars
2-18 ($10.00)> for each laborer, workman or mechanic employed, for each
2-19 calendar day, or portion thereof, such laborer, workman or mechanic
2-20 is paid less than the said stipulated rates for any work done under
2-21 said contract, <by him, or by any subcontractor under him,> and the
2-22 said public body awarding the contract shall cause to be inserted
2-23 in the contract a stipulation to this effect. The money collected
2-24 under this subsection shall be used by the awarding body to offset
2-25 the costs incurred in the administration of this section.
2-26 (c) Upon receipt of a complaint by a laborer, workman, or
2-27 mechanic or other pertinent information, the public body shall
3-1 determine within 30 days whether good cause exists to believe that
3-2 a contractor or subcontractor has committed a violation of this
3-3 Act. The public body shall provide written notice of its
3-4 determination to the contractor or subcontractor and any affected
3-5 laborer, workman, or mechanic. The public body shall retain any
3-6 amounts due under the contract pending a final determination of the
3-7 violation.
3-8 (d) If the contractor or subcontractor and any affected
3-9 laborer, workman, or mechanic fail to resolve the alleged violation
3-10 by agreement within 14 days of the determination by the public
3-11 body, the issues of the alleged violation, any penalties owed to
3-12 the public body, and any amounts owed to any affected laborer,
3-13 workman, or mechanic shall be submitted to binding arbitration in
3-14 accordance with the provisions of the Texas General Arbitration Act
3-15 (Art. 224 et seq., Revised Statutes). If the parties fail to agree
3-16 upon an arbitrator within 10 days, the arbitrator shall be
3-17 designated by the district court upon petition of any party. The
3-18 decision and award of the arbitrator is final and binding upon all
3-19 parties and may be enforced in any court of competent jurisdiction.
3-20 The public body is not a party in the arbitration.
3-21 (e) The arbitrator shall assess and award all reasonable
3-22 costs, including the arbitrator's fee, against the party or parties
3-23 who fail to prevail in the proceeding. Costs may be assessed
3-24 against the workman, laborer, or mechanic only if the arbitrator
3-25 finds that the claim was frivolous. If the arbitrator does not
3-26 find that the claim is frivolous and does not make an award to the
3-27 laborer, workman, or mechanic, costs will be shared equally by the
4-1 parties. If the arbitrator determines that a violation of the Act
4-2 has occurred, the arbitrator shall assess and award penalties as
4-3 provided in the Act and all amounts owed to the affected workman,
4-4 laborer, or mechanic against the contractor or subcontractor.
4-5 (f) The public body shall use any amounts retained under
4-6 this subsection to reimburse the laborer, workman, or mechanic for
4-7 the amount owed to that person because of the failure to pay the
4-8 person the general prevailing rate of per diem wages as provided in
4-9 the arbitrators' award. The public body may adopt rules, orders,
4-10 or ordinances relating to the manner in which the reimbursement is
4-11 made to the laborer, workman, or mechanic. An officer, agent, or
4-12 employee of a public body is not liable in a civil action for any
4-13 act or omission implementing or enforcing this Act unless the
4-14 action was made in bad faith. The contractor is entitled to rely
4-15 on a certificate by a subcontractor as to the payment of all sums
4-16 due to those working for and under that subcontractor until the
4-17 contrary has been determined.
4-18 (g) If the amounts withheld by, if any, the public body
4-19 under Subsection (c) of this section are insufficient to fully
4-20 reimburse the laborer, workman, or mechanic for amounts owed to
4-21 that person under the terms of this Act, that person has a right of
4-22 action against the contractor or subcontractor and the surety of
4-23 that person to recover any amounts owed, reasonable attorney's fees
4-24 and court costs.
4-25 (h) It shall be the duty of such public body awarding the
4-26 contract, and its agents and officers, to take cognizance of
4-27 complaints of all violations of the provisions of this Act
5-1 committed in the course of the execution of the contract, and, when
5-2 making payments to the contractor of monies becoming due under said
5-3 contract, to withhold and retain <therefrom> all sums and amounts
5-4 <which shall have been> forfeited or required to be retained under
5-5 this section <pursuant to the herein said stipulation and the terms
5-6 of this Act>; provided, however, that no sum shall be so withheld,
5-7 retained or forfeited, except from the final payment, without a
5-8 determination <full investigation> by the awarding body that good
5-9 cause exists to believe that a violation has occurred.
5-10 (i) It shall be lawful for any contractor to withhold from
5-11 any subcontractor under him sufficient sums to cover any amounts
5-12 <penalties> withheld from him by the awarding body on account of
5-13 the said subcontractor's failure to comply with the terms of this
5-14 Act, and if payment has already been made to the subcontractor,
5-15 <him> the contractor may withhold the amount from any future
5-16 payments owed to the subcontractor or recover from the
5-17 subcontractor or the subcontractor's surety in a suit at law <him>
5-18 the amount retained or forfeited <of the penalty or forfeiture in a
5-19 suit at law>.
5-20 SECTION 2. This Act takes effect September 1, 1993, and
5-21 applies only to a public works contract entered on or after that
5-22 date.
5-23 SECTION 3. The importance of this legislation and the
5-24 crowded condition of the calendars in both houses create an
5-25 emergency and an imperative public necessity that the
5-26 constitutional rule requiring bills to be read on three several
5-27 days in each house be suspended, and this rule is hereby suspended.