BILL ANALYSIS


                                                     C.S.S.B. 662
                                                       By: Harris
                                                    Jurisprudence
                                                          4-19-95
                                   Committee Report (Substituted)
BACKGROUND

Construction contract clauses prevent subcontractors from having
entitlement to payment for properly performed work by not
obligating the general contractor to make payment to the
subcontractor.  Typically, this is accomplished through the payment
clause whereby the general contractor makes its obligation to pay
the subcontractor contingent upon events occurring other than the
subcontractor properly performing the work.

PURPOSE

As proposed, C.S.S.B. 662 provides that certain agreements for the
payment of subcontractors are against public policy and are void.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not grant any
additional rulemaking authority to a state officer, institution, or
agency.

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Chapter 35D, Business and Commerce Code, by
adding Section 35.521, as follows:

     Sec. 35.521.  AGREEMENT FOR PAYMENT OF CONSTRUCTION
     SUBCONTRACTOR.  (a)  Provides that a provision of a contract
     or other agreement, by which payment from an original
     contractor to a subcontractor is conditioned on receipt of
     payment from another person, is against public policy and is
     void.
     
     (b)  Defines "original contractor," "owner," and
       "subcontractor."
       
       SECTION 2.   Makes application of this Act prospective.

SECTION 3. Effective date:  September 1, 1995.

SECTION 4. Emergency clause.