81R6395 AJA-F
By: McClendon H.B. No. 1209
A BILL TO BE ENTITLED
AN ACT
relating to beneficiaries of construction payment trust funds.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 162.001(c), Property Code, is amended to
read as follows:
(c) A fee payable to a contractor is not considered trust
funds if:
(1) the [If a] contractor and property owner have
entered into a written construction contract for the improvement of
specific real property in this state before the commencement of
construction of the improvement and the contract provides for the
payment by the owner of the costs of construction and a reasonable
fee specified in the contract payable to the contractor; and
(2) [,] the fee is earned as provided by the contract
and paid to the contractor or disbursed from a construction account
described by Section 162.006, if applicable [is not considered
trust funds].
SECTION 2. Section 162.003, Property Code, is amended to
read as follows:
Sec. 162.003. BENEFICIARIES OF TRUST FUNDS. (a) An
artisan, laborer, mechanic, contractor, subcontractor, or
materialman who labors or who furnishes labor or material for the
construction or repair of an improvement on specific real property
in this state is a beneficiary of any trust funds paid or received
in connection with the improvement.
(b) A property owner is a beneficiary of trust funds
described by Section 162.001 in connection with a residential
construction contract, including funds deposited into a
construction account described by Section 162.006.
SECTION 3. The change in law made by this Act applies only
to funds that become trust funds under Section 162.001, Property
Code, as amended by this Act, on or after the effective date of this
Act. Funds that become trust funds before the effective date of
this Act are governed by the law in effect immediately before the
effective date of this Act, and that law is continued in effect for
that purpose.
SECTION 4. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2009.