By Ritter                                             H.B. No. 3122
         Line and page numbers may not match official copy.
         Bill not drafted by TLC or Senate E&E.
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to prompt payment requirements for work performed by
 1-3     contractors and subcontractors on certain real property.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1. Section 28.002, Property Code, is amended to read
 1-6     as follows:
 1-7           Sec. 28.002.  Prompt Pay Required. (a)  If an owner or a
 1-8     person authorized to act on behalf of the owner receives a written
 1-9     payment request from a contractor for an amount that is allowed to
1-10     the contractor under the contract for properly performed work or
1-11     suitably stored or specially fabricated materials, the owner shall
1-12     pay the amount to the contractor, less any amount withheld as
1-13     authorized by statute, not later than the 21st [35th] day after the
1-14     date the owner receives the request.
1-15           (b)  A contractor who receives a payment under Subsection (a)
1-16     or otherwise from an owner in connection with a contract to improve
1-17     real property shall pay each of its subcontractors the portion of
1-18     the owner's payment, including interest, if any, that is
1-19     attributable to work properly performed or materials suitably
1-20     stored or specially fabricated as provided under the contract by
1-21     that subcontractor to the extent of that subcontractor's interest
1-22     in the owner's payment.  The payment required by this subsection
1-23     must be made not later than the seventh day after the date the
 2-1     contractor receives the owner's payment.
 2-2           (c)  A subcontractor who receives a payment under Subsection
 2-3     (b) or otherwise from a contractor in connection with a contract to
 2-4     improve real property shall pay each of its subcontractors the
 2-5     portion of the payment, including interest, if any, that is
 2-6     attributable to work properly performed or materials suitably
 2-7     stored or specially fabricated as provided under the contract by
 2-8     that subcontractor, to the extent of that subcontractor's interest
 2-9     in the payment.  The payment required by this subsection must be
2-10     made not later than the seventh day after the date the
2-11     subcontractor receives the contractor's payment.
2-12           SECTION 2.  (a)  This Act takes effect September 1, 2001.
2-13           (b)  The changes in law made by this Act apply only to a
2-14     contract or agreement involving work performed on real property by
2-15     a contractor or subcontractor that is entered into on or after the
2-16     effective date of this Act.  A contract or agreement entered into
2-17     before the effective date of this Act is governed by the law in
2-18     effect when the contract was entered into, and the former law is
2-19     continued in effect for that purpose.
2-20           SECTION 3. The importance of this legislation and the crowded
2-21     condition of the calendars in both houses create an emergency and
2-22     an imperative public necessity that the constitutional rule
2-23     requiring bills to be read on three several days in each house be
2-24     suspended, and this rule is hereby suspended.