By: Smith of Harris (Senate Sponsor - Jackson) H.B. No. 1513
(In the Senate - Received from the House April 23, 2009;
April 24, 2009, read first time and referred to Committee on
Business and Commerce; May 14, 2009, reported favorably by the
following vote: Yeas 8, Nays 0; May 14, 2009, sent to printer.)
A BILL TO BE ENTITLED
AN ACT
relating to construction contract trust funds and the
misapplication of those 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 162.001, Property Code, is amended by
adding Subsection (d) to read as follows:
(d) Trust funds paid to a creditor under this chapter are
not property or an interest in property of a debtor who is a trustee
described by Section 162.002.
SECTION 3. 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 4. Section 162.004, Property Code, is amended by
adding Subsection (c) to read as follows:
(c) Regardless of whether a construction contract is
covered by a statutory or common law payment bond, this chapter
applies to a public or private construction contract for the
improvement of specific real property in this state.
SECTION 5. Section 162.031, Property Code, is amended by
adding Subsection (d) to read as follows:
(d) A trustee who commingles trust funds with other funds in
the trustee's possession does not defeat a trust created by this
chapter.
SECTION 6. This Act takes effect September 1, 2009.
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