By Bosse, Williams                                    H.B. No. 1742

                                A BILL TO BE ENTITLED

 1-1                                   AN ACT

 1-2     relating to residential construction liability.

 1-3           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-4           SECTION 1.  Section 27.001(3), Property Code, is amended to

 1-5     read as follows:

 1-6                 (3)  "Contractor" means:

 1-7                       (A)  a person contracting  with an owner for the

 1-8     construction or  sale of a new residence constructed by that

 1-9     person;

1-10                       (B)  a person contracting with an owner for the

1-11     [or of an] alteration or repair of or addition to an existing

1-12     residence;

1-13                       (C)  a person contracting with an owner for the

1-14     [, repair of a new or existing residence, or] construction, [sale,]

1-15     alteration, addition, or repair of an appurtenance to a new or

1-16     existing residence;

1-17                       (D)  a person providing a warranty covering

1-18     defects in a residence or a person administering the warranty on

1-19     behalf of the person providing the warranty;

1-20                       (E)  a person insuring [.  The term "contractor"

1-21     also includes a risk retention group registered under Article

1-22     21.54, Insurance Code, that insures] all or any part of a

1-23     contractor's liability for the cost to repair a residential

1-24     construction defect; or

 2-1                       (F)  an officer, director, shareholder, or

 2-2     employee of the contractor or a subcontractor or design

 2-3     professional hired by the contractor to perform the construction,

 2-4     alteration, addition, or repair.

 2-5           SECTION 2.  Section 27.002(a), Property Code, is amended to

 2-6     read as follows:

 2-7           (a)  This chapter applies to any action to recover damages

 2-8     resulting from a construction defect, except a claim for personal

 2-9     injury, survival, or wrongful death or for damage to goods, by an

2-10     owner of a residence, including an owner subsequent to the owner

2-11     contracting with the contractor.  To the extent of conflict between

2-12     this chapter and any other law, including the Deceptive Trade

2-13     Practices-Consumer Protection Act (Subchapter E, Chapter 17,

2-14     Business & Commerce Code), this chapter prevails.

2-15           SECTION 3.  Sections 27.004(g) and (i), Property Code, are

2-16     amended to read as follows:

2-17           (g)  If a contractor fails to make a reasonable offer under

2-18     this section, or fails to make a reasonable attempt to complete the

2-19     repairs specified in an accepted offer made under this section, or

2-20     fails to complete, in a good and workmanlike manner, the repairs

2-21     specified in an accepted offer made under this section, the

2-22     limitations on damages and defenses to liability provided for in

2-23     Subsection (f) [this section] shall not apply.

2-24           (i)  The total damages awarded in a suit subject to this

2-25     chapter, excluding reasonable and necessary attorney's fees,

2-26     arbitration expenses, and taxable costs, may not exceed the greater

2-27     of the claimant's purchase price for the residence or the fair

 3-1     market value of the residence without the construction defect.

 3-2           SECTION 4.  The changes in law made by this Act apply only to

 3-3     an action for residential construction liability filed on or after

 3-4     the effective date of this Act.  An action filed before the

 3-5     effective date of this Act is governed by the law in effect at the

 3-6     time of filing, and the prior law is continued in effect for that

 3-7     purpose.

 3-8           SECTION 5.  This Act takes effect September 1, 1997.

 3-9           SECTION 6.  The importance of this legislation and the

3-10     crowded condition of the calendars in both houses create an

3-11     emergency and an imperative public necessity that the

3-12     constitutional rule requiring bills to be read on three several

3-13     days in each house be suspended, and this rule is hereby suspended.