By Bosse, et al. H.B. No. 2311 77R7518 ATP-F A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to certain agreements for the payment of subcontractors. 1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-4 SECTION 1. SHORT TITLE. This Act may be cited as the 1-5 Subcontractor's Right to be Paid Act. 1-6 SECTION 2. LEGISLATIVE FINDINGS. The legislature finds that: 1-7 (1) persons who furnish work, labor, and services, or 1-8 provide materials for the improvements of real property have the 1-9 right to be paid timely; 1-10 (2) contingent payment provisions in construction 1-11 contracts operate as an improper waiver of a subcontractor's right 1-12 to be paid by a general contractor for work properly performed; and 1-13 (3) the surrender of the right to be paid as a 1-14 prerequisite to obtaining a contract is against public policy and 1-15 should be void. 1-16 SECTION 3. Subchapter D, Chapter 35, Business & Commerce 1-17 Code, is amended by adding Section 35.521 to read as follows: 1-18 Sec. 35.521. AGREEMENT FOR PAYMENT OF CONSTRUCTION 1-19 SUBCONTRACTOR. (a) In this section: 1-20 (1) "Improvement" includes new construction, 1-21 remodeling, or repair. 1-22 (2) "Original contractor" means a person contracting 1-23 with an owner either directly or through the owner's agent for the 1-24 improvement of the owner's real property. The term includes a 2-1 person who performs construction management services. 2-2 (3) "Owner" means a person who has an interest in real 2-3 property. 2-4 (4) "Subcontractor" means a person who contracts to 2-5 furnish labor or material to an original contractor or another 2-6 subcontractor in connection with a contract for the improvement of 2-7 real property. 2-8 (b) A provision in a contract or other agreement that 2-9 provides that the payment of a subcontractor for work performed or 2-10 materials furnished is conditioned on the receipt of payment by the 2-11 original contractor or another subcontractor from another person, 2-12 including the owner for whom the improvement is being made, is 2-13 void. 2-14 (c) A person may not waive this section by contract or other 2-15 means. A purported waiver of this section is void. 2-16 SECTION 4. This Act takes effect September 1, 2001, and 2-17 applies only to a contract or agreement entered into on or after 2-18 the effective date of this Act. A contract or agreement entered 2-19 into before the effective date of this Act is governed by the law 2-20 in effect when the contract or agreement was entered into, and the 2-21 former law is continued in effect for that purpose.