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.