By Gray                                               H.B. No. 2641
       74R4676 LJR-F
                                 A BILL TO BE ENTITLED
    1-1                                AN ACT
    1-2  relating to certain agreements for the payment of subcontractors.
    1-3        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
    1-4        SECTION 1.  Subchapter D, Chapter 35, Business & Commerce
    1-5  Code, is amended by adding Section 35.521 to read as follows:
    1-6        Sec. 35.521.  AGREEMENT FOR PAYMENT OF CONSTRUCTION
    1-7  SUBCONTRACTOR.  (a)  A provision of a contract or other agreement
    1-8  by which payment from an original contractor to a subcontractor is
    1-9  conditioned on receipt of payment from another person, including a
   1-10  private or public owner for whom an improvement is being made, is
   1-11  against public policy and is void.
   1-12        (b)  In this section:
   1-13              (1)  "Original contractor" means a person who directly
   1-14  or indirectly contracts with an owner to improve the owner's real
   1-15  property, including construction, remodeling, repair, or
   1-16  improvement of the property.
   1-17              (2)  "Owner" means a person who has an interest in real
   1-18  property.
   1-19              (3)  "Subcontractor" means a person who contracts to
   1-20  furnish labor or material to an original contractor or another
   1-21  subcontractor in connection with a contract to improve real
   1-22  property.
   1-23        SECTION 2.  This Act applies only to a contract or other
   1-24  agreement entered into on or after the effective date of this Act.
    2-1        SECTION 3.  This Act takes effect September 1, 1995.
    2-2        SECTION 4.  The importance of this legislation and the
    2-3  crowded condition of the calendars in both houses create an
    2-4  emergency and an imperative public necessity that the
    2-5  constitutional rule requiring bills to be read on three several
    2-6  days in each house be suspended, and this rule is hereby suspended.