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
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   3-25  Name:  Richard Levy                              x
   3-26  Representing:  Tx AFL-CIO
   3-27  City:  Austin
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   3-29  Name:  Gale E. Van Hoy                           x
   3-30  Representing:  Tx Bldg Trades Council
   3-31  City:  Austin
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   3-33  Name:  Jim Sewell                                x
   3-34  Representing:  Assoc. General Contractors
   3-35  City:  Austin
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