By: Wentworth S.B. No. 1274 A BILL TO BE ENTITLED AN ACT 1-1 relating to certain procedures involving retainage payments to real 1-2 property construction subcontractors. 1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-4 SECTION 1. Subchapter A, Chapter 53, Property Code, is 1-5 amended by adding Section 53.004 to read as follows: 1-6 Sec. 53.004. RETAINAGE. (a) Any retainage withheld accrues 1-7 interest at two points below the prime rate payable to the person 1-8 entitled to receive the retained funds. Any retainage withheld 1-9 after the 45th day after the date work is completed, as defined by 1-10 Section 53.106, accrues interest at 1-1/2 percent each month 1-11 payable to the person entitled to receive the retained funds. In 1-12 this subsection, "prime rate" means the interest rate prevailing in 1-13 the market as published by reputable public sources on the date the 1-14 work commences. 1-15 (b) Interest on retained funds stops accruing under this 1-16 section on the earlier of: 1-17 (1) the date the funds are delivered; 1-18 (2) the date the funds are mailed, if the funds are 1-19 delivered not later than the third day after the date the funds are 1-20 mailed; or 1-21 (3) the date a judgment is entered in an action 1-22 brought to recover the retained funds. 1-23 SECTION 2. (a) This Act takes effect September 1, 1999. 1-24 (b) The changes in law made by this Act apply only to 2-1 matters relating to or claims arising under an original contract, 2-2 as that term is defined by Section 53.001, Property Code, that is 2-3 executed on or after September 1, 1999. Matters relating to or 2-4 claims arising under an original contract that was executed before 2-5 September 1, 1999, are governed by the law as it existed on the 2-6 date the original contract was executed, and the former law is 2-7 continued in effect for that purpose. 2-8 SECTION 3. The importance of this legislation and the 2-9 crowded condition of the calendars in both houses create an 2-10 emergency and an imperative public necessity that the 2-11 constitutional rule requiring bills to be read on three several 2-12 days in each house be suspended, and this rule is hereby suspended.