By: Barry H.B. No. 2021

A BILL TO BE ENTITLED

AN ACT

relating to certain construction liability claims.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 2272.001, Government Code, is amended to read as follows:

Sec. 2272.001. DEFINITIONS.

(9) "Critical Infrastructure Facility" means

(a) The same as defined by Chapter 59 of the Business and Commerce Code.

(b) For the purposes of this chapter, the definition of "critical infrastructure facility" excludes the following:

(1) a natural gas compressor station;

(2) a liquid natural gas terminal or storage facility;

(3) a telecommunications central switching office or any structure used as part of a system to provide wired or wireless telecommunications services;

(4) a port, railroad switching yard, trucking terminal, or other freight transportation facility;

(5) a transmission facility used by a federally licensed radio or television station;

(6) a steelmaking facility that uses an electric arc furnace to make steel;

(7) a dam that is classified as a high hazard by the Texas Commission on Environmental Quality;

(8) any portion of an aboveground oil, gas, or chemical pipeline;

(9) an oil or gas drilling site;

(10) a group of tanks used to store crude oil, such as a tank battery;

(11) an oil or gas wellhead;

(12) any oil and gas facility that has an active flare; and

(13) 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, storage, or processing of CO2, 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.

SECTION 2. Chapter 2272, Government Code, is amended by adding the following section:

Sec. 2272.002. APPLICABILITY OF CHAPTER

(a) for:

(1) damages arising from damage to or loss of real or personal property caused by an alleged construction defect in an improvement to real property that is a public building or public work; or

(2) indemnity or contribution for damages described by Paragraph (A);

(3) asserted by a governmental entity with an interest in the public building or public work affected by the alleged construction defect; and

(4) asserted against a contractor, subcontractor, supplier, or design professional.

(b) (1) damages arising from damage to or loss of real or personal property caused by an alleged construction defect in an improvement to real property that is a private construction contract exceeding $10 million

(2) indemnity or contribution for damages described by Paragraph (B);

(3) asserted by a private owner with an interest in the construction contract affected by the alleged construction defect; and

(4) asserted against a contractor, subcontractor, supplier, or design professional.

(c) This chapter does not apply to:

(1) a claim for personal injury, survival, or wrongful death;

(2) a claim involving the construction of residential property covered under Chapter 27, Property Code;

(3) a contract entered into by the Texas Department of Transportation;

(4) a project that receives money from a state or federal highway fund; or

(5) a civil works project as defined by Section 2269.351.

(5) a "critical infrastructure facility" as defined by Sec. 2272.001 (9).

SECTION 3. Chapter 2272, Government Code, is amended by adding the following section:

Sec. 2272.003. REPORT.

(a) Before bringing an action asserting a claim to which this chapter applies, the governmental entity or private owner must provide each party with whom the governmental entity or private owner has a contract for the design or construction of an affected structure a written report by certified mail, return receipt requested, that clearly:

(1) identifies the specific construction defect on which the claim is based;

(2) describes the present physical condition of the affected structure; and

(3) describes any modification, maintenance, or repairs to the affected structure made by the governmental entity or private owner or others since the affected structure was initially occupied or used.

(b) Not later than the fifth day after the date a contractor receives a report under Subsection (a), the contractor must provide a copy of the report to each subcontractor retained on the construction of the affected structure whose work is subject to the claim.

SECTION 4. Chapter 2272, Government Code, is amended by adding the following section:

Sec. 2272.004. OPPORTUNITY TO INSPECT AND CORRECT.

(a) Before bringing an action asserting a claim to which this chapter applies, the governmental entity or a party to a private construction contract exceeding $10 million must allow each party with whom the governmental entity or private owner has a contract for the design or construction of an affected structure and who is subject to the claim and any known subcontractor or supplier who is subject to the claim:

(1) a reasonable opportunity to inspect any construction defect or related condition identified in the report for a period of 30 days after sending the report required by Section 2272.003; and

(2) at least 120 days after the inspection to:

(A) correct any construction defect or related condition identified in the report; or

(B) enter into a separate agreement with the governmental entity or private owner to correct any construction defect or related condition identified in the report.

(b) The governmental entity or private owner is not required to allow a party to make a correction or repair under Subsection (a) if:

(1) the party:

(A) is a contractor and cannot provide payment and performance bonds to cover the corrective work if applicable;

(B) cannot provide liability insurance or workers' compensation insurance;

(C) has been previously terminated for cause by the governmental entity or private owner; or

(D) has been convicted of a felony; or

(2) the governmental entity or private owner previously complied with the process required by Subsection (a) regarding a construction defect or related condition identified in the report and:

(A) the defect or condition was not corrected as required by Subsection (a)(2)(A) or an agreement under Subsection (a)(2)(B); or

(B) the attempt to correct the construction defect or related condition identified in the report resulted in a new construction defect or related condition.

SECTION 5. Chapter 2272, Government Code, is amended by adding the following section:

Sec. 2272.006. DISMISSAL.

(a) If a governmental entity or private owner brings an action asserting a claim to which this chapter applies without complying with Sections 2272.003 and 2272.004, the court, arbitrator, or other adjudicating authority shall dismiss the action without prejudice.

(b) If an action is dismissed without prejudice under Subsection (a) and the governmental entity or private owner brings a second action asserting a claim to which this chapter applies without complying with Sections 2272.003 and 2272.004, the court, arbitrator, or other adjudicating authority shall dismiss the action with prejudice.

SECTION 6. Chapter 2272, Government Code, is amended by adding the following section:

Sec. 2272.007. RECOVERY OF REPORT COSTS.

If a report provided by a governmental entity or private owner under Section 2272.003 identifies a construction defect that is corrected under Section 2272.004 or for which the governmental entity or private owner recovers damages, the party responsible for that construction defect shall pay the reasonable amounts incurred by the governmental entity or private owner to obtain the report with respect to identification of that construction defect.

SECTION 7. Effective Date:

This act takes effect on September 1, 2025.