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A BILL TO BE ENTITLED
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AN ACT
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relating to certain deposits in a construction account. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 162.006, Property Code, is amended by |
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amending Subsection (b) and adding Subsection (c) to read as |
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follows: |
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(b) A property owner who enters into a construction loan or |
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financing agreement to pay toward the improvement of specific real |
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property that is secured wholly or partly by a lien on the property |
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shall deposit in a construction account 10 percent of the loan |
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receipts that are advanced for paying toward the construction of |
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the improvement to be held in trust for a person described by |
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Section 162.003(a). The trust funds under this subsection may be |
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used only in satisfying the owner's obligations and the claimant's |
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rights under Subchapter E, Chapter 53. Trust funds remaining in the |
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construction account after the date that the owner satisfies the |
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obligations and rights under Subchapter E, Chapter 53, may be used |
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to satisfy other obligations under this chapter. |
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(c) The periodic statement received from the financial |
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institution must refer to the account as a "construction account" |
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to satisfy the requirements of this section. |
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SECTION 2. The change in law made by this Act applies only |
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to the satisfaction of an obligation incurred and a right accrued |
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under Subchapter E, Chapter 53, Property Code, on or after the |
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effective date of this Act. An obligation incurred or a right |
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accrued under Subchapter E, Chapter 53, Property Code, before the |
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effective date of this Act is governed by the law as it existed |
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immediately before that date, and that law is continued in effect |
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for that purpose. |
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SECTION 3. This Act takes effect September 1, 2011. |