82R13526 PMO-F
By: Wentworth S.B. No. 1425
A BILL TO BE ENTITLED
AN ACT
relating to certain deposits in a construction account.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 162.006, Property Code, is amended by
amending Subsection (b) and adding Subsection (c) to read as
follows:
(b) A property owner who enters into a construction loan or
financing agreement to pay toward the improvement of specific real
property that is secured wholly or partly by a lien on the property
shall deposit in a construction account 10 percent of the loan
receipts that are advanced for paying toward the construction of
the improvement to be held in trust for a person described by
Section 162.003(a). The trust funds under this subsection may be
used only in satisfying the owner's obligations and the claimant's
rights under Subchapter E, Chapter 53. Trust funds remaining in the
construction account after the date that the owner satisfies the
obligations and rights under Subchapter E, Chapter 53, may be used
to satisfy other obligations under this chapter.
(c) The periodic statement received from the financial
institution must refer to the account as a "construction account"
to satisfy the requirements of this section.
SECTION 2. The change in law made by this Act applies only
to the satisfaction of an obligation incurred and a right accrued
under Subchapter E, Chapter 53, Property Code, on or after the
effective date of this Act. An obligation incurred or a right
accrued under Subchapter E, Chapter 53, Property Code, before the
effective date of this Act is governed by the law as it existed
immediately before that date, and that law is continued in effect
for that purpose.
SECTION 3. This Act takes effect September 1, 2011.