1-1 By: Martin (Senate Sponsor - Barrientos) H.B. No. 560
1-2 (In the Senate - Received from the House May 12, 1993;
1-3 May 13, 1993, read first time and referred to Committee on
1-4 Intergovernmental Relations; May 20, 1993, reported adversely, with
1-5 favorable Committee Substitute by the following vote: Yeas 10,
1-6 Nays 0; May 20, 1993, sent to printer.)
1-7 COMMITTEE VOTE
1-8 Yea Nay PNV Absent
1-9 Armbrister x
1-10 Leedom x
1-11 Carriker x
1-12 Henderson x
1-13 Madla x
1-14 Moncrief x
1-15 Patterson x
1-16 Rosson x
1-17 Shapiro x
1-18 Wentworth x
1-19 Whitmire x
1-20 COMMITTEE SUBSTITUTE FOR H.B. No. 560 By: Madla
1-21 A BILL TO BE ENTITLED
1-22 AN ACT
1-23 relating to the payment of certain laborers, workers, and mechanics
1-24 under public works contracts.
1-25 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-26 SECTION 1. Section 2, Chapter 45, General Laws, Acts of the
1-27 43rd Legislature, Regular Session, 1933 (Article 5159a, Vernon's
1-28 Texas Civil Statutes), is amended as follows:
1-29 Sec. 2. (a) The public body awarding any contract for
1-30 public work on behalf of the State, or on behalf of any county,
1-31 city and county, city, town, district or other political
1-32 subdivision thereof, or otherwise undertaking any public work,
1-33 shall ascertain the general prevailing rate of per diem wages in
1-34 the locality in which the work is to be performed for each craft or
1-35 type of workman or mechanic needed to execute the contract, and
1-36 shall specify in the call for bids for said contract, and in the
1-37 contract itself, what the general prevailing rate of per diem wages
1-38 in the said locality is for each craft or type of workman needed to
1-39 execute the contract, also the prevailing rate for legal holiday
1-40 and overtime work, and it shall be mandatory upon the contractor to
1-41 whom the contract is awarded, and upon any subcontractor under him,
1-42 to pay not less than the said specified rates to all laborers,
1-43 workmen and mechanics employed by them in the execution of the
1-44 contract. Failure of the awarding body to ascertain and specify in
1-45 the call for the contract the prevailing wage rate in that locality
1-46 relieves the contractor or subcontractor from liability under this
1-47 Act.
1-48 (b) A contractor or subcontractor in violation of this Act
1-49 is liable for <The contractor shall forfeit as> a penalty. That
1-50 contractor or subcontractor shall pay to the State, county <city
1-51 and county, city, town> or city with more than 10,000 residents,
1-52 district or other political subdivision on whose behalf the
1-53 contract is made or awarded, Sixty Dollars ($60.00) <Ten Dollars
1-54 ($10.00)> for each laborer, workman or mechanic is paid less than
1-55 the said stipulated rates for any work done under said contract,
1-56 <by him, or by any subcontractor under him,> and the said public
1-57 body awarding the contract shall cause to be inserted in the
1-58 contract a stipulation to this effect. The money collected under
1-59 this subsection shall be used by the awarding body to offset the
1-60 costs incurred in the administration of this section.
1-61 (c) Upon receipt of a complaint by a laborer, workman, or
1-62 mechanic or other pertinent information, the public body shall
1-63 determine within 30 days whether good cause exists to believe that
1-64 a contractor or subcontractor has committed a violation of this
1-65 Act. The public body shall provide written notice of its
1-66 determination to the contractor or subcontractor and any affected
1-67 laborer, workman, or mechanic. The public body shall retain any
1-68 amounts due under the contract pending a final determination of the
2-1 violation.
2-2 (d) If the public body, the contractor or subcontractor, and
2-3 any affected laborer, workman, or mechanic fail to resolve the
2-4 alleged violation by agreement within 14 days of the determination
2-5 by the public body, the issues of the alleged violation, any
2-6 penalties owed to the public body, and any amounts owed to any
2-7 affected laborer, workman, or mechanic shall be submitted to
2-8 binding arbitration in accordance with the provisions of the Texas
2-9 General Arbitration Act (R.C.S. Arts. 224 et seq.). If the parties
2-10 fail to agree upon an arbitrator within 10 days, the arbitrator
2-11 shall be designated by the district court upon petition of any
2-12 party. The decision and award of the arbitrator is final and
2-13 binding upon all parties and may be enforced in any court of
2-14 competent jurisdiction.
2-15 (e) The arbitrator shall assess and award all reasonable
2-16 costs, including the arbitrator's fee, against the party or parties
2-17 who fail to prevail in the proceeding. Costs may be assessed
2-18 against the workman, laborer, or mechanic only if the arbitrator
2-19 finds that the claim was frivolous. If the arbitrator determines
2-20 that a violation of the Act has occurred, the arbitrator shall
2-21 assess and award penalties as provided in the Act and all amounts
2-22 owed to the affected workman, laborer, or mechanic against the
2-23 contractor or subcontractor.
2-24 (f) The public body shall use any amounts retained under
2-25 this subsection to reimburse the laborer, workman, or mechanic for
2-26 the amount owed to that person because of the failure to pay the
2-27 person the general prevailing rate of per diem wages as provided in
2-28 the arbitrators' award. The public body may adopt rules, orders,
2-29 or ordinances relating to the manner in which the reimbursement is
2-30 made to the laborer, workman, or mechanic. An officer, agent, or
2-31 employee of a public body is not liable in a civil action for any
2-32 act or omission implementing or enforcing this Act unless the
2-33 action was made in bad faith. The contractor is entitled to rely
2-34 on a certificate by a subcontractor as to the payment of all sums
2-35 due to those working for and under that subcontractor until the
2-36 contrary has been determined.
2-37 (g) If the amounts withheld by, if any, the public body
2-38 under Subsection (c) of this section are insufficient to fully
2-39 reimburse the laborer, workman, or mechanic for amounts owed to
2-40 that person under the terms of this Act, that person has a right of
2-41 action against the contractor or subcontractor and the surety of
2-42 that person to recover any amounts owed, reasonable attorney's fees
2-43 and court costs.
2-44 (h) It shall be the duty of such public body awarding the
2-45 contract, and its agents and officers, to take cognizance of
2-46 complaints of all violations of the provisions of this Act
2-47 committed in the course of the execution of the contract, and, when
2-48 making payments to the contractor of monies becoming due under said
2-49 contract, to withhold and retain (therefrom) all sums and amounts
2-50 <which shall have been> forfeited or required to be retained under
2-51 this section <pursuant to the herein said stipulation and the terms
2-52 of this Act>; provided, however, that no sum shall be so withheld,
2-53 retained or forfeited, except from the final payment, without a
2-54 determination by the awarding body that good cause exists to
2-55 believe that a violation has occurred.
2-56 (i) It shall be lawful for any contractor to withhold from
2-57 any subcontractor under him sufficient sums to cover any amounts
2-58 <penalties> withheld from him by the awarding body on account of
2-59 the said subcontractor's failure to comply with the terms of this
2-60 Act, and if payment has already been made to the subcontractor,
2-61 <him> the contractor may withhold the amount from any future
2-62 payments owed to the subcontractor or the subcontractor's surety in
2-63 a suit at law <him> the amount retained or forfeited <of the
2-64 penalty or forfeiture in a suit at law>.
2-65 SECTION 2. This Act takes effect September 1, 1993, and
2-66 applies only to a public works contract entered on or after that
2-67 date.
2-68 SECTION 3. The importance of this legislation and the
2-69 crowded condition of the calendars in both houses create an
2-70 emergency and an imperative public necessity that the
3-1 constitutional rule requiring bills to be read on three several
3-2 days in each house be suspended, and this rule is hereby suspended.
3-3 * * * * *
3-4 Austin,
3-5 Texas
3-6 May 20, 1993
3-7 Hon. Bob Bullock
3-8 President of the Senate
3-9 Sir:
3-10 We, your Committee on Intergovernmental Relations to which was
3-11 referred H.B. No. 560, have had the same under consideration, and I
3-12 am instructed to report it back to the Senate with the
3-13 recommendation that it do not pass, but that the Committee
3-14 Substitute adopted in lieu thereof do pass and be printed.
3-15 Armbrister,
3-16 Chairman
3-17 * * * * *
3-18 WITNESSES
3-19 FOR AGAINST ON
3-20 ___________________________________________________________________
3-21 Name: Bill Driskill x
3-22 Representing: Associated General Contractors
3-23 City: Austin
3-24 -------------------------------------------------------------------
3-25 Name: Richard Levy x
3-26 Representing: Tx AFL-CIO
3-27 City: Austin
3-28 -------------------------------------------------------------------
3-29 Name: Gale E. Van Hoy x
3-30 Representing: Tx Bldg Trades Council
3-31 City: Austin
3-32 -------------------------------------------------------------------
3-33 Name: Jim Sewell x
3-34 Representing: Assoc. General Contractors
3-35 City: Austin
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