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A BILL TO BE ENTITLED
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AN ACT
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relating to construction contract trust funds and the |
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misapplication of those funds. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 162.001(c), Property Code, is amended to |
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read as follows: |
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(c) A fee payable to a contractor is not considered trust |
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funds if: |
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(1) the [If a] contractor and property owner have |
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entered into a written construction contract for the improvement of |
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specific real property in this state before the commencement of |
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construction of the improvement and the contract provides for the |
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payment by the owner of the costs of construction and a reasonable |
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fee specified in the contract payable to the contractor; and |
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(2) [,] the fee is earned as provided by the contract |
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and paid to the contractor or disbursed from a construction account |
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described by Section 162.006, if applicable [is not considered
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trust funds]. |
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SECTION 2. Section 162.001, Property Code, is amended by |
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adding Subsection (d) to read as follows: |
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(d) Trust funds paid to a creditor under this chapter are |
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not property or an interest in property of a debtor who is a trustee |
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described by Section 162.002. |
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SECTION 3. Section 162.003, Property Code, is amended to |
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read as follows: |
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Sec. 162.003. BENEFICIARIES OF TRUST FUNDS. (a) An |
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artisan, laborer, mechanic, contractor, subcontractor, or |
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materialman who labors or who furnishes labor or material for the |
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construction or repair of an improvement on specific real property |
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in this state is a beneficiary of any trust funds paid or received |
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in connection with the improvement. |
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(b) A property owner is a beneficiary of trust funds |
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described by Section 162.001 in connection with a residential |
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construction contract, including funds deposited into a |
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construction account described by Section 162.006. |
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SECTION 4. Section 162.004, Property Code, is amended by |
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adding Subsection (c) to read as follows: |
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(c) Regardless of whether a construction contract is |
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covered by a statutory or common law payment bond, this chapter |
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applies to a public or private construction contract for the |
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improvement of specific real property in this state. |
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SECTION 5. Section 162.031, Property Code, is amended by |
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adding Subsection (d) to read as follows: |
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(d) A trustee who commingles trust funds with other funds in |
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the trustee's possession does not defeat a trust created by this |
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chapter. |
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SECTION 6. This Act takes effect September 1, 2009. |
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* * * * * |