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A BILL TO BE ENTITLED
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AN ACT
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relating to the application of funds under certain construction |
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contracts. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 162.031, Property Code, is amended by |
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adding Subsection (a-1) to read as follows: |
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(a-1) This subsection applies only to a trustee who receives |
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trust funds or who has control or direction of trust funds in |
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connection with a nonresidential construction contract. A trustee, |
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other than an owner, who retains or otherwise diverts trust funds |
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due to a dispute, including an alleged default, arising under a |
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construction contract other than the contract in connection with |
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which the trust funds were received by or placed under the control |
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or direction of the trustee has misapplied the trust funds. For |
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purposes of this subsection, "owner" means the person or entity |
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that: |
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(1) owns or controls the premises at which |
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construction of improvements is to be performed; and |
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(2) is responsible for payment to the contractor for |
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the construction of improvements. |
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SECTION 2. The changes in law made by this Act apply only to |
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a contract that is entered into on or after the effective date of |
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this Act. |
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SECTION 3. This Act takes effect September 1, 2025. |