1-1 By: Wentworth S.B. No. 1274 1-2 (In the Senate - Filed March 11, 1999; March 11, 1999, read 1-3 first time and referred to Committee on Economic Development; 1-4 May 14, 1999, reported adversely, with favorable Committee 1-5 Substitute by the following vote: Yeas 4, Nays 0; May 14, 1999, 1-6 sent to printer.) 1-7 COMMITTEE SUBSTITUTE FOR S.B. No. 1274 By: Madla 1-8 A BILL TO BE ENTITLED 1-9 AN ACT 1-10 relating to certain procedures involving retainage payments to real 1-11 property construction subcontractors. 1-12 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-13 SECTION 1. Subchapter A, Chapter 53, Property Code, is 1-14 amended by adding Section 53.004 to read as follows: 1-15 Sec. 53.004. RETAINAGE. (a) Any retainage withheld accrues 1-16 interest at the prime rate payable to the person entitled to 1-17 receive the retained funds. Any retainage withheld after the 45th 1-18 day after the date work is completed, as defined by Section 53.106, 1-19 accrues interest at 1-1/2 percent each month payable to the person 1-20 entitled to receive the retained funds. In this subsection, "prime 1-21 rate" means the interest rate prevailing in the market as published 1-22 by reputable public sources on the date the work commences. 1-23 (b) Interest on retained funds stops accruing under this 1-24 section on the earlier of: 1-25 (1) the date the funds are delivered; 1-26 (2) the date the funds are mailed, if the funds are 1-27 delivered not later than the third day after the date the funds are 1-28 mailed; or 1-29 (3) the date a judgment is entered in an action 1-30 brought to recover the retained funds. 1-31 SECTION 2. (a) This Act takes effect September 1, 1999. 1-32 (b) The changes in law made by this Act apply only to 1-33 matters relating to or claims arising under an original contract, 1-34 as that term is defined by Section 53.001, Property Code, that is 1-35 executed on or after September 1, 1999. Matters relating to or 1-36 claims arising under an original contract that was executed before 1-37 September 1, 1999, are governed by the law as it existed on the 1-38 date the original contract was executed, and the former law is 1-39 continued in effect for that purpose. 1-40 * * * * *