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A BILL TO BE ENTITLED
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AN ACT
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relating to prompt payment of contractors and subcontractors under |
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a contract to improve real property. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 28.009, Property Code, is amended by |
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adding Subsection (b-1) to read as follows: |
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(b-1) If a contractor fails to apply to the owner for payment |
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on or before the 15th day after the last day of a calendar month, or |
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if an owner fails to provide notice of payment to the original |
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contractor as provided by Section 53.005, a subcontractor may |
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suspend the subcontractor's contractually required performance on |
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the 10th day after the date the subcontractor gives the owner and |
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the owner's lender written notice: |
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(1) informing the owner and lender that payment has |
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not been received; and |
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(2) stating the intent of the subcontractor to suspend |
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performance for nonpayment. |
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SECTION 2. Section 53.001(2), Property Code, is amended to |
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read as follows: |
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(2) "Improvement" includes: |
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(A) abutting sidewalks and streets and utilities |
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in or on those sidewalks and streets; |
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(B) clearing, grubbing, draining, or fencing of |
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land; |
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(C) wells, cisterns, tanks, reservoirs, or |
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artificial lakes or pools made for supplying or storing water; |
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(D) pumps, siphons, and windmills or other |
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machinery or apparatuses used for raising water for stock, domestic |
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use, or irrigation; [and] |
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(E) planting orchard trees, grubbing out |
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orchards and replacing trees, and pruning of orchard trees; and |
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(F) demolishing, dismantling, and removing an |
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existing improvement to real property that is related to the |
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construction of an improvement to the real property. |
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SECTION 3. Subchapter A, Chapter 53, Property Code, is |
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amended by adding Sections 53.004 through 53.007 to read as |
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follows: |
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Sec. 53.004. NOTICE OF COMMENCEMENT. (a) Before beginning |
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to improve real property, the owner or the owner's agent shall |
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record a notice of commencement in the county clerk's office of each |
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county in which the property is located. |
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(b) The notice of commencement must contain: |
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(1) a description, legally sufficient for |
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identification, of the property to be improved, the street address |
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of the property, if available, or, if a street address is not |
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available, additional information that describes the physical |
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location of the real property to be improved; |
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(2) a general description of the improvements to be |
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constructed or installed; |
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(3) the name and address of the owner, a description of |
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the owner's interest in the site of the improvements, and the name |
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and address of the fee simple title holder, if different from the |
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owner; |
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(4) the name and address of the original contractor; |
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(5) the name and address of the surety on any payment |
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bond applicable to the construction project, and the amount of the |
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bond; |
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(6) the name and address of any person making a loan |
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for the construction or installment of the improvements; and |
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(7) the name and address in this state of any person |
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other than the owner whom the owner has designated to accept notices |
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or other documents for the owner. |
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Sec. 53.005. NOTICE OF PAYMENT BY OWNER. (a) Each time an |
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owner makes a payment to an original contractor or assesses a charge |
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or offset instead of a payment to an original contractor, the owner |
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shall send a notice of the payment or offset to each party entitled |
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to receive the notice under this section. |
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(b) The notice of payment or offset must include: |
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(1) the date of the payment, credit, or offset; |
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(2) the amount of the payment, credit, or offset; |
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(3) the means of transmitting the payment, credit, or |
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offset; |
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(4) the allocation of the payment, credit, or offset |
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by trade or scheduled value; |
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(5) the total amount paid or otherwise credited to the |
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original contractor for the project, including the current payment |
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or credit; |
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(6) the amount remaining to be paid to the original |
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contractor under the terms of the contract between the owner and the |
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original contractor; and |
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(7) the total value of the contract between the |
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original contractor and the owner for the project that is the |
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subject of the notice, including all changes and additions as of the |
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date of the notice. |
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(c) The notice of payment shall be sent to each |
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subcontractor and other person that has provided notice or |
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requested notices under Section 53.056, 53.057, 53.058, or 53.060. |
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Sec. 53.006. NOTICE OF COMPLETION. Not later than the 10th |
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day after the date of completion of an original contract, the owner |
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or the owner's authorized agent shall send a notice of completion to |
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each subcontractor and other person that has provided notice or |
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requested notices under Section 53.056, 53.057, 53.058, or 53.060. |
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Sec. 53.007. WAIVER PROHIBITED. The provisions of this |
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chapter may not be waived by contract. |
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SECTION 4. Section 53.057(e), Property Code, is amended to |
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read as follows: |
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(e) A claimant is not required to give any other notice as to |
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the retainage if the [If a] claimant gives notice: |
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(1) under this section and Section 53.055; |
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(2) under Sections 53.055 and 53.060; or |
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(3) [,] if the claim relates to a residential |
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construction project, under this section and Section 53.252 [, the
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claimant is not required to give any other notice as to the
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retainage]. |
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SECTION 5. Subchapter C, Chapter 53, Property Code, is |
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amended by adding Section 53.060 to read as follows: |
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Sec. 53.060. SUBCONTRACTOR REQUEST FOR NOTICE. (a) A |
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subcontractor may request that the owner provide the subcontractor |
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with any notices required under this chapter. |
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(b) A request under this section must contain: |
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(1) a description of the general nature of the labor, |
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materials, and services to be provided by the subcontractor; |
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(2) the full name and mailing address of the |
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subcontractor; and |
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(3) a statement that the subcontractor requests that |
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the owner send the subcontractor copies of all statutorily required |
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notices sent by the owner with respect to improvements under the |
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original contract. |
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(c) The request must be sent in the same manner as a notice |
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under Section 53.003 to the last known business address or |
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residence address of the owner or reputed owner, with a copy to the |
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original contractor. |
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SECTION 6. Section 53.084, Property Code, is amended by |
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amending Subsection (a) and adding Subsection (c) to read as |
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follows: |
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(a) Except for the amount required to be retained under |
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Subchapter E, if the owner has filed a full and accurate notice of |
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commencement as required by Section 53.004, the owner is not liable |
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for any amount paid to the original contractor before the owner is |
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authorized to withhold funds under this subchapter. |
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(c) Notwithstanding Subsection (a), an owner who fails to |
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send the notice of payment as required by Section 53.005 and has |
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received the notices required by Subchapter C or K is liable and the |
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owner's property is subject to a claim for any money paid to the |
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original contractor after the first date on which the owner failed |
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to send notice of payment under Section 53.005 if the lien has been |
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secured and if the claim has been reduced to final judgment. The |
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owner is liable for that amount in addition to any amount for which |
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the owner is liable under Subchapter E. |
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SECTION 7. The changes in law made by this Act apply only to |
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an original contract, as defined by Section 53.001, Property Code, |
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executed on or after the effective date of this Act. An original |
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contract executed before the effective date of this Act is subject |
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to the law in effect immediately before that date, and that law is |
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continued in effect for that purpose. |
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SECTION 8. This Act takes effect September 1, 2007. |