By Bosse                                              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.