Relating to the payment or application of funds under construction contracts.
The bill modifies the Property Code by clarifying that a good faith dispute does not include issues related to contracts or agreements not tied to the specific construction project in question. It amends both the Construction Trust Fund Act and the Prompt Pay Act to further reinforce the intended legal protections established by previous legislation. The changes will specifically apply to contracts initiated after the bill's effective date of September 1, 2023.
House Bill 2928, introduced by Chairman Turner, addresses the payment and application of funds under construction contracts in Texas. The bill aims to enhance protections for construction subcontractors, who typically work on tight profit margins and can suffer significantly from payment delays. By ensuring that retainage disputes are strictly between the contractor and subcontractor concerning the specific project in question, the bill is designed to protect subcontractors from being held liable for unrelated disputes, thereby promoting prompt payments for their work.
Discussions surrounding HB 2928 showcased strong support from various stakeholders, including representatives from the Texas Construction Association. Testimonies emphasized that the lack of timely payments adversely affects subcontractors and the construction industry at large. Supporters viewed the bill as a necessary legislative measure to ensure that each construction project is treated independently concerning payment disputes, thereby fostering a more equitable operational environment for subcontractors.
Debate over HB 2928 primarily revolved around its implications for payment practices within the construction industry. While proponents lauded the bill's potential to alleviate financial strain on subcontractors by promoting faster payments, there remains an important consideration of how these provisions will affect broader contractual relationships and responsibilities. Continuous testimonies from industry professionals highlighted concerns over maintaining fair practices while protecting the rights of both contractors and subcontractors.