By: Hughes  S.B. No. 219
         (In the Senate - Filed November 30, 2020; March 3, 2021,
  read first time and referred to Committee on State Affairs;
  March 24, 2021, reported adversely, with favorable Committee
  Substitute by the following vote:  Yeas 6, Nays 1; March 24, 2021,
  sent to printer.)
Click here to see the committee vote
 
  COMMITTEE SUBSTITUTE FOR S.B. No. 219 By:  Hughes
 
 
A BILL TO BE ENTITLED
 
AN ACT
 
  relating to civil liability and responsibility for the consequences
  of defects in the plans, specifications, or related documents for
  the construction or repair of an improvement to real property.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Title 4, Business & Commerce Code, is amended by
  adding Chapter 59 to read as follows:
  CHAPTER 59. RESPONSIBILITY FOR DEFECTS IN PLANS AND SPECIFICATIONS
  SUBCHAPTER A. GENERAL PROVISIONS
         Sec. 59.0001.  DEFINITIONS. In this chapter:
               (1)  "Construction" includes:
                     (A)  the initial construction of an improvement to
  real property;
                     (B)  the construction of an addition to an
  improvement to real property; or
                     (C)  the repair, alteration, or remodeling of an
  improvement to real property.
               (2)  "Contractor" means a person engaged in the
  business of developing, constructing, fabricating, repairing,
  altering, or remodeling improvements to real property.
               (3)  "Critical infrastructure facility" has the
  meaning assigned by Section 423.0045, Government Code, provided
  that the absence of fencing or signage described in the definition
  provided by that section does not disqualify an item listed in that
  definition from being classified or treated as a critical
  infrastructure facility for purposes of this chapter. The term
  includes:
                     (A)  pipelines and pipeline appurtenances or
  facilities, including pipes, valves, meters, pumps, compressors,
  treating and processing facilities, cathodic protection
  facilities, and any other equipment, facilities, devices,
  structures, and buildings used or intended for use in the
  gathering, transportation, treating, or processing of oil, gas, or
  other minerals, and the liquefied or gaseous substances,
  constituents, products, or mixtures derived from those minerals
  through refining, processing, or other methods;
                     (B)  utility-scale equipment or facilities to
  transmit or distribute electricity; and
                     (C)  utility-scale water storage facilities.
               (4)  "Design-build contract" means a contract in which
  a single contractor agrees to:
                     (A)  construct, repair, alter, or remodel an
  improvement to real property; and 
                     (B)  be responsible for the development of plans,
  specifications, or other design or bid documents used by the
  contractor to construct, repair, alter, or remodel the improvement.
               (5)  "Subcontractor" means a contractor directly
  retained and compensated by another contractor to perform labor or
  perform labor and supply materials in the construction.
  SUBCHAPTER B. CONTRACTOR RESPONSIBILITY
         Sec. 59.0051.  APPLICABILITY OF SUBCHAPTER. (a) This
  subchapter applies only to a contract for the construction or
  repair of an improvement to real property.
         (b)  This subchapter does not apply to a contract entered
  into by a person for the construction or repair of a critical
  infrastructure facility owned or operated by the person or any
  building, structure, improvement, appurtenance, or other facility
  owned by the person that is necessary to the operation of and
  directly related to the critical infrastructure facility.  For
  purposes of this subsection, "person" includes a parent,
  subsidiary, affiliated entity, joint venture partner, or owner of
  the person.
         (c)  This chapter does not apply to the construction, repair,
  alteration, or remodeling of an improvement to real property if:
               (1)  the construction, repair, alteration, or
  remodeling is performed under a design-build contract; and
               (2)  the part of the plans, specifications, or other
  design or bid documents for which the contractor is responsible
  under the contract is the part alleged to be defective.
         Sec. 59.0052.  LIMITATION ON CONTRACTOR'S LIABILITY AND
  RESPONSIBILITY FOR CERTAIN DEFECTS. (a) A contractor is not
  responsible for the consequences of defects in and may not warranty
  the accuracy, adequacy, sufficiency, or suitability of plans,
  specifications, or other design or bid documents provided to the
  contractor by: 
               (1)  the person with whom the contractor entered into
  the contract; or
               (2)  another person on behalf of the person with whom
  the contractor entered into the contract.
         (b)  A contractor must, within a reasonable time of learning
  of the defect, disclose in writing to the person with whom the
  contractor enters into a contract the existence of any known defect
  in the plans, specifications, or other design or bid documents that
  is discovered by the contractor, or that reasonably should have
  been discovered by the contractor using ordinary diligence, before
  or during construction.
         (c)  A contractor who fails to disclose a condition as
  required by Subsection (b) may be liable for the consequences of
  defects that result from the failure to disclose.
         Sec. 59.0053.  STANDARD OF CARE FOR CERTAIN DESIGNS. Design
  services provided under a design-build contract are subject to the
  same standard of care requirements provided in Section 130.0021,
  Civil Practice and Remedies Code.
         Sec. 59.0054.  WAIVER PROHIBITED. This subchapter may not
  be waived by a contractor, subcontractor, or owner.  A purported
  waiver of this subchapter in violation of this section is void.
         SECTION 2.  The heading to Chapter 130, Civil Practice and
  Remedies Code, is amended to read as follows:
  CHAPTER 130.  LIABILITY PROVISIONS [INDEMNIFICATION] IN CERTAIN
  CONSTRUCTION CONTRACTS
         SECTION 3.  Chapter 130, Civil Practice and Remedies Code,
  is amended by adding Section 130.0021 to read as follows:
         Sec. 130.0021.  ARCHITECT'S OR ENGINEER'S STANDARD OF CARE.  
  (a) A construction contract for architectural or engineering
  services or a contract related to the construction or repair of an
  improvement to real property that contains architectural or
  engineering services as a component part must require that the
  architectural or engineering services be performed with the
  professional skill and care ordinarily provided by competent
  architects or engineers practicing under the same or similar
  circumstances and professional license. 
         (b)  If a contract described by Subsection (a) contains a
  provision establishing a different standard of care than the
  standard described by Subsection (a):
               (1)  the provision is void and unenforceable; and
               (2)  the standard of care described by Subsection (a)
  applies to the performance of the architectural or engineering
  services.
         (c)  Section 130.004 does not limit the applicability of this
  section.
         SECTION 4.  Section 130.004, Civil Practice and Remedies
  Code, is amended to read as follows:
         Sec. 130.004.  OWNER OF INTEREST IN REAL PROPERTY. (a)
  Except as provided by Section 130.002(b) or 130.0021, this chapter
  does not apply to an owner of an interest in real property or
  persons employed solely by that owner.
         (b)  Except as provided by Section 130.002(b) or 130.0021,
  this chapter does not prohibit or make void or unenforceable a
  covenant or promise to:
               (1)  indemnify or hold harmless an owner of an interest
  in real property and persons employed solely by that owner; or
               (2)  allocate, release, liquidate, limit, or exclude
  liability in connection with a construction contract between an
  owner or other person for whom a construction contract is being
  performed and a registered architect or licensed engineer.
         SECTION 5.  (a)  The changes in law made by this Act apply
  only to a contract entered into on or after the effective date of
  this Act. A contract entered into before the effective date of this
  Act is governed by the law in effect when the contract was entered
  into, and the former law is continued in effect for that purpose.
         (b)  An original contract for the construction or repair of
  an improvement to real property with the owner of an interest in
  real property that is entered into before the effective date of this
  Act, and a subcontract or purchase order for providing labor or
  materials associated with that original contract, whether the
  subcontract or purchase order is entered into before, on, or after
  the effective date of this Act, is governed by the law in effect
  when the original contract was entered into, and the former law is
  continued in effect for that purpose.
         SECTION 6.  This Act takes effect September 1, 2021.
 
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