By Harris S.B. No. 1067
77R8337 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. AMENDMENT. Subchapter D, Chapter 35, Business &
1-17 Commerce Code, is amended by adding Section 35.521 to read as
1-18 follows:
1-19 Sec. 35.521. AGREEMENT FOR PAYMENT OF CONSTRUCTION
1-20 SUBCONTRACTOR. (a) In this section:
1-21 (1) "Improvement" includes new construction,
1-22 remodeling, or repair.
1-23 (2) "Original contractor" means a person contracting
1-24 with an owner either directly or through the owner's agent for the
2-1 improvement of the owner's real property. The term includes a
2-2 person who performs construction management services.
2-3 (3) "Owner" means a person who has an interest in real
2-4 property.
2-5 (4) "Political subdivision" has the meaning assigned
2-6 by Section 2251.001, Government Code.
2-7 (5) "State agency" has the meaning assigned by Section
2-8 2251.001, Government Code.
2-9 (6) "Subcontractor" means a person who contracts to
2-10 furnish labor or material to an original contractor or another
2-11 subcontractor in connection with a contract for the improvement of
2-12 real property.
2-13 (b) A provision in a contract or other agreement that
2-14 provides that the payment of a subcontractor for work performed or
2-15 materials furnished is conditioned on the receipt of payment by the
2-16 original contractor or another subcontractor from another person,
2-17 including the owner for whom the improvement is being made, is
2-18 void.
2-19 (c) A person may not waive this section by contract or other
2-20 means. A purported waiver of this section is void.
2-21 (d) This section does not apply to a contract or agreement
2-22 entered into by a state agency or a political subdivision of this
2-23 state.
2-24 SECTION 4. EFFECTIVE DATE. This Act takes effect September
2-25 1, 2001, and applies only to a contract or agreement entered into
2-26 on or after the effective date of this Act. A contract or
2-27 agreement entered into before the effective date of this Act is
3-1 governed by the law in effect when the contract or agreement was
3-2 entered into, and the former law is continued in effect for that
3-3 purpose.