By Brimer H.B. No. 2717
Line and page numbers may not match official copy.
Bill not drafted by TLC or Senate E&E.
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to construction or repair of improvements to real property
1-3 located in this state.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 28.002, Property Code, is amended to read
1-6 as follows:
1-7 Sec. 28.002. Prompt Pay Required. (a) A contractor shall
1-8 submit invoices at least monthly to the owner for goods or services
1-9 provided for the owner, including goods or services provided to the
1-10 contractor by a subcontractor. A subcontractor shall submit
1-11 invoices at least monthly to the contractor for goods or services
1-12 provided for the contractor, including goods or services provided
1-13 to the subcontractor by another subcontractor. This subsection
1-14 does not apply to improvements to or construction of a
1-15 single-family residence, duplex, triplex, or quadruplex.
1-16 (b) If an owner or a person authorized to act on behalf of
1-17 the owner receives a written payment request from a contractor for
1-18 an amount that is allowed to the contractor under the contract for
1-19 properly performed work or suitably stored or specially fabricated
1-20 materials, the owner shall pay the amount to the contractor, less
1-21 any amount withheld as authorized by statute [statutory offsets],
2-1 not later than the 45th day after the owner receives the request.
2-2 (c) [(b)] A contractor who receives a payment under
2-3 Subsection (b) [(a)] or otherwise from an owner in connection with
2-4 a contract to improve real property shall pay each of its
2-5 subcontractors the portion of the owner's payment, including
2-6 interest, if any, that is attributable to work properly performed
2-7 or materials suitably stored or specially fabricated as provided
2-8 under the contract by that subcontractor [if payment for stored
2-9 materials is provided for in the contract], to the extent of that
2-10 subcontractor's interest in the owner's payment. The payment
2-11 required by this subsection must be made not later than the seventh
2-12 day after the date the contractor receives the owner's payment.
2-13 (d) [(c)] A subcontractor who receives a payment under
2-14 Subsection (c) [(b)] or otherwise from a contractor in connection
2-15 with a contract to improve real property shall pay each of its
2-16 subcontractors the portion of the payment, including interest, if
2-17 any, that is attributable to work properly performed or materials
2-18 suitably stored or specially fabricated as provided under the
2-19 contract by that subcontractor [if payment for stored materials is
2-20 provided for in the contract], to the extent of that
2-21 subcontractor's interest in the payment. The payment required by
2-22 this subsection must be made not later than the seventh day after
2-23 the date the subcontractor receives the contractor's payment.
2-24 SECTION 2. Subsection (b), Section 28.006, Property Code, is
2-25 amended to read as follows:
3-1 (b) A written contract between an owner and a contractor for
3-2 improvements to or construction of a single-family residence may
3-3 provide that the payment required under Section 28.002(b)
3-4 [28.002(a)] be made not later than a date that occurs before the
3-5 61st day after the date the owner receives the payment request.
3-6 Notwithstanding Section 28.004(b), an unpaid amount under contract
3-7 subject to this subsection that allows payment later than the date
3-8 otherwise required under Section 28.002(b) [28.002(a)] bears
3-9 interest at the rate of 1 1/2 percent each month.
3-10 SECTION 3. Subsection (a), Section 162.006, Property Code,
3-11 is amended to read as follows:
3-12 (a) A contractor who enters into a written or oral contract
3-13 with a property owner to construct improvements to a residential
3-14 homestead for an amount exceeding $5,000 shall deposit the trust
3-15 funds in a construction account in a financial institution.
3-16 SECTION 4. Subsections (b) and (c), Section 35.52, Business
3-17 & Commerce Code, are amended to read as follows:
3-18 (b) A contract is principally for the construction or repair
3-19 of improvements to real property located in this state if the
3-20 contract obligates a party, as its principal obligation under the
3-21 contract, to provide labor, materials, or both labor and
3-22 materials[,] for the construction or repair of improvements to real
3-23 property located in this state as a general contractor or
3-24 subcontractor.
3-25 (c) A contract is not principally for the construction or
4-1 repair of improvements to real property located in this state if:
4-2 (1) the contract is a partnership agreement or other
4-3 agreement governing an entity or trust;
4-4 (2) the contract provides for a loan or other
4-5 extension of credit and the party promising to construct or repair
4-6 improvements does so as part of its agreement or agreements with
4-7 the lender or other extender of credit; or
4-8 (3) the contract is for the management of real
4-9 property or improvements and the obligation to construct or repair
4-10 is part of that management.
4-11 SECTION 5. Section 130.001, Civil Practice and Remedies
4-12 Code, is amended to read as follows:
4-13 Sec. 130.001. Definition. In this chapter "construction
4-14 contract" means a contract or agreement made and entered into by an
4-15 owner, contractor, subcontractor, artisan, or supplier concerning
4-16 the construction, alteration, repair, or maintenance of a building,
4-17 structure, appurtenance, road, highway, bridge, dam, levee, or
4-18 other improvement to or on real property in this state, including
4-19 moving, demolition, abatement, and excavation connected with the
4-20 real property.
4-21 SECTION 6. Subsection (c), Section 2166.259, Government
4-22 Code, is amended to read as follows:
4-23 (c) The commission shall provide for the centralized
4-24 purchasing of:
4-25 (1) workers' compensation insurance coverage;
5-1 (2) employer's liability insurance coverage;
5-2 (3) commercial general and excess liability coverage;
5-3 (4) payment and performance bonds; [and]
5-4 (5) pollution liability coverage; and
5-5 (6) [(5)] other similar coverage the commission
5-6 considers necessary and reasonable for the public works project in
5-7 this state.
5-8 SECTION 7. Subsection (a), Section 2166.305, Government
5-9 Code, is amended to read as follows:
5-10 (a) The commission shall require a review of the uniform
5-11 general conditions of state building construction contracts
5-12 whenever the commission considers review worthwhile, but not less
5-13 frequently than once every three [five] years.
5-14 SECTION 8. Subsection (c), Section 406.096, Labor Code, is
5-15 amended to read as follows:
5-16 (c) A contractor who has a contract that requires workers'
5-17 compensation insurance coverage may provide the coverage through a
5-18 group plan, qualified self-insurance plan, or other method
5-19 satisfactory to the governing body of the governmental entity.
5-20 SECTION 9. This Act takes effect September 1, 1999.
5-21 SECTION 10. The importance of this legislation and the
5-22 crowded condition of the calendars in both houses create an
5-23 emergency and an imperative public necessity that the
5-24 constitutional rule requiring bills to be read on three several
5-25 days in each house be suspended, and this rule is hereby suspended.