By Barrientos                                         S.B. No. 1192
       74R6080 PAM-D
                                 A BILL TO BE ENTITLED
    1-1                                AN ACT
    1-2  relating to the procedure for perfecting a mechanic's lien of a
    1-3  subcontractor.
    1-4        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
    1-5        SECTION 1.  Sections 53.053(b) and (c), Property Code, are
    1-6  amended to read as follows:
    1-7        (b)  Indebtedness to an original contractor or subcontractor
    1-8  accrues:
    1-9              (1)  on the last day of the month in which a written
   1-10  declaration by the original contractor or the owner is received by
   1-11  the other party to the original contract stating that the original
   1-12  contract has been terminated; or
   1-13              (2)  on the last day of the month in which the original
   1-14  contract has been completed, finally settled, or abandoned.
   1-15        (c)  Indebtedness to a <subcontractor, or to any> person not
   1-16  covered by Subsection (b) or (d), who has furnished labor or
   1-17  material to an original contractor or to another subcontractor
   1-18  accrues on the last day of the last month in which the labor was
   1-19  performed or the material furnished.
   1-20        SECTION 2.  Subchapter C, Chapter 53, Property Code, is
   1-21  amended by adding Section 53.0535 to read as follows:
   1-22        Sec. 53.0535.  NOTICE TO SUBCONTRACTOR REQUIRED.  (a)  An
   1-23  original contractor shall notify each subcontractor who has not
   1-24  been paid that the original contract has been terminated,
    2-1  completed, finally settled, or abandoned not later than the 10th
    2-2  business day after the date:
    2-3              (1)  the original contractor receives from or sends to
    2-4  the owner notice that the original contract is terminated; or
    2-5              (2)  the original contract is completed, finally
    2-6  settled, or abandoned.
    2-7        (b)  If the original contractor fails to notify a
    2-8  subcontractor as required by Subsection (a), the period in which
    2-9  the subcontractor must file a lien under Section 53.052 is tolled
   2-10  until the date the subcontractor knows or reasonably should have
   2-11  known that the original contract was terminated, completed, finally
   2-12  settled, or abandoned.
   2-13        SECTION 3.  Section 53.056(c), Property Code, is amended to
   2-14  read as follows:
   2-15        (c)  If the lien claim arises from a debt incurred by the
   2-16  original contractor:
   2-17              (1)  a claimant who is a subcontractor must give notice
   2-18  to the owner or reputed owner, with a copy to the original
   2-19  contractor, not later than the 30th day after the date the
   2-20  subcontractor knew or reasonably should have known the original
   2-21  contract was terminated, completed, finally settled, or abandoned;
   2-22  and
   2-23              (2)  a<, the> claimant who is not a subcontractor must
   2-24  give notice to the owner or reputed owner, with a copy to the
   2-25  original contractor, in accordance with Subsection (b).
   2-26        SECTION 4.  The changes in law made by this Act apply only to
   2-27  subcontractors who furnish labor or materials under an original
    3-1  contract entered into by an owner and an original contractor on or
    3-2  after the effective date of this Act.  Subcontractors who furnish
    3-3  labor or materials under an original contract entered into before
    3-4  the effective date of this Act are covered by the law in effect
    3-5  when the original contract was entered into, and the former law is
    3-6  continued in effect for that purpose.
    3-7        SECTION 5.  The importance of this legislation and the
    3-8  crowded condition of the calendars in both houses create an
    3-9  emergency and an imperative public necessity that the
   3-10  constitutional rule requiring bills to be read on three several
   3-11  days in each house be suspended, and this rule is hereby suspended.