By Wentworth S.B. No. 1274
76R8788 PAM-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to certain procedures involving retainage payments to real
1-3 property construction subcontractors.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Subchapter A, Chapter 53, Property Code, is
1-6 amended by adding Section 53.004 to read as follows:
1-7 Sec. 53.004. RETAINAGE. (a) A person contracting with a
1-8 subcontractor to perform labor or furnish labor, materials, or
1-9 specially fabricated materials under or by virtue of a contract
1-10 with the owner or the owner's agent, trustee, receiver, contractor,
1-11 or subcontractor may not require the subcontractor to execute an
1-12 agreement providing for retainage in a percentage greater than the
1-13 retainage percentage in the original contract.
1-14 (b) Any retainage withheld as provided by this chapter
1-15 accrues interest at six percent each year payable to the person
1-16 entitled to receive the retained funds.
1-17 SECTION 2. Section 53.081(c), Property Code, is amended to
1-18 read as follows:
1-19 (c) If notice is sent under Section 53.057 or 53.252(c), the
1-20 owner may withhold funds immediately on receipt of [a copy of] the
1-21 notice [claimant's affidavit prepared in accordance with Sections
1-22 53.052 through 53.055].
1-23 SECTION 3. Section 53.103, Property Code, is amended to read
1-24 as follows:
2-1 Sec. 53.103. LIEN ON RETAINED FUNDS. (a) Except as provided
2-2 by Subsection (b), a [A] claimant has a lien on the retained funds
2-3 if the claimant:
2-4 (1) sends the notices required by this chapter in the
2-5 time and manner required; and
2-6 (2) files an affidavit claiming a lien not later than
2-7 the 30th day after the work is completed.
2-8 (b) If a claimant sends notice under Section 53.057 or
2-9 53.252(c), the claimant has a lien on retained funds.
2-10 SECTION 4. Section 53.252(c), Property Code, is amended to
2-11 read as follows:
2-12 (c) To authorize the owner to withhold funds under
2-13 Subchapter D, [the] notice must be sent as provided by Section
2-14 53.057, if applicable, and the notice to the owner must state that
2-15 if the claim remains unpaid, the owner may be personally liable and
2-16 the owner's property may be subjected to a lien unless:
2-17 (1) the owner withholds payments from the contractor
2-18 for payment of the claim; or
2-19 (2) the claim is otherwise paid or settled.
2-20 SECTION 5. (a) This Act takes effect September 1, 1999.
2-21 (b) The changes in law made by this Act apply only to
2-22 matters relating to or claims arising under an original contract,
2-23 as that term is defined by Section 53.001, Property Code, that is
2-24 executed or after September 1, 1999. Matters relating to or claims
2-25 arising under an original contract that was executed before
2-26 September 1, 1999, are governed by the law as it existed on the
2-27 date the original contract was executed, and the former law is
3-1 continued in effect for that purpose.