| 1 | 1 | | 85R26241 CLG-F |
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| 2 | 2 | | By: Workman H.B. No. 1844 |
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| 3 | 3 | | Substitute the following for H.B. No. 1844: |
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| 4 | 4 | | By: Smithee C.S.H.B. No. 1844 |
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| 5 | 5 | | |
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| 6 | 6 | | |
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| 7 | 7 | | A BILL TO BE ENTITLED |
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| 8 | 8 | | AN ACT |
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| 9 | 9 | | relating to choice of law and venue for certain construction |
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| 10 | 10 | | contracts. |
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| 11 | 11 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 12 | 12 | | SECTION 1. The heading to Chapter 272, Business & Commerce |
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| 13 | 13 | | Code, is amended to read as follows: |
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| 14 | 14 | | CHAPTER 272. LAW APPLICABLE TO CERTAIN CONSTRUCTION CONTRACTS [FOR |
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| 15 | 15 | | CONSTRUCTION OR REPAIR OF REAL PROPERTY IMPROVEMENTS] |
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| 16 | 16 | | SECTION 2. Chapter 272, Business & Commerce Code, is |
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| 17 | 17 | | amended by adding Section 272.0001 and amending Sections 272.001 |
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| 18 | 18 | | and 272.002 to read as follows: |
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| 19 | 19 | | Sec. 272.0001. DEFINITION. In this chapter, "construction |
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| 20 | 20 | | contract" means a contract, subcontract, or agreement entered into |
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| 21 | 21 | | or made by an owner, architect, engineer, contractor, construction |
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| 22 | 22 | | manager, subcontractor, supplier, or material or equipment lessor |
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| 23 | 23 | | for the design, construction, alteration, renovation, remodeling, |
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| 24 | 24 | | or repair of, or for the furnishing of material or equipment for, a |
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| 25 | 25 | | building, structure, appurtenance, or other improvement to or on |
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| 26 | 26 | | public or private real property, including moving, demolition, and |
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| 27 | 27 | | excavation connected with the real property. The term includes an |
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| 28 | 28 | | agreement to which an architect, engineer, or contractor and an |
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| 29 | 29 | | owner's lender are parties regarding an assignment of the |
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| 30 | 30 | | construction contract or other modifications thereto. |
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| 31 | 31 | | Sec. 272.001. VOIDABLE CONTRACT PROVISION. (a) This |
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| 32 | 32 | | section applies only to a construction contract concerning [that is |
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| 33 | 33 | | principally for the construction or repair of an improvement to] |
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| 34 | 34 | | real property located in this state. |
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| 35 | 35 | | (b) If a construction contract or an agreement collateral to |
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| 36 | 36 | | or affecting the construction contract contains a provision making |
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| 37 | 37 | | the contract or agreement or any conflict arising under the |
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| 38 | 38 | | contract or agreement subject to another state's law, litigation in |
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| 39 | 39 | | the courts of another state, or arbitration in another state, that |
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| 40 | 40 | | provision is voidable by a [the] party obligated by the contract or |
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| 41 | 41 | | agreement to perform the work that is the subject of the |
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| 42 | 42 | | construction contract [or repair]. |
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| 43 | 43 | | Sec. 272.002. INAPPLICABILITY OF CHAPTER [CONTRACT |
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| 44 | 44 | | PRINCIPALLY FOR CONSTRUCTION OR REPAIR OF REAL PROPERTY |
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| 45 | 45 | | IMPROVEMENTS]. This chapter does not apply to a construction [(a) |
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| 46 | 46 | | For purposes of this chapter, a contract is principally for the |
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| 47 | 47 | | construction or repair of an improvement to real property located |
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| 48 | 48 | | in this state if the contract obligates a party, as the party's |
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| 49 | 49 | | principal obligation under the contract, to provide labor or labor |
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| 50 | 50 | | and materials as a general contractor or subcontractor for the |
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| 51 | 51 | | construction or repair of an improvement to real property located |
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| 52 | 52 | | in this state. |
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| 53 | 53 | | [(b) For purposes of this chapter, a contract is not |
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| 54 | 54 | | principally for the construction or repair of an improvement to |
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| 55 | 55 | | real property located in this state if the] contract that: |
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| 56 | 56 | | (1) is a partnership agreement or other agreement |
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| 57 | 57 | | governing an entity or trust; |
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| 58 | 58 | | (2) provides for a loan or other extension of credit |
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| 59 | 59 | | and the party promising to perform the work that is the subject of |
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| 60 | 60 | | the construction contract [construct or repair the improvement] is |
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| 61 | 61 | | doing so as part of the party's agreements with the lender or other |
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| 62 | 62 | | person who extends credit; or |
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| 63 | 63 | | (3) is for the management of real property or |
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| 64 | 64 | | improvements and the obligation to perform the work that is the |
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| 65 | 65 | | subject of the construction contract [construct or repair the |
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| 66 | 66 | | improvement] is part of that management. |
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| 67 | 67 | | [(c) Subsections (a) and (b) do not provide an exclusive |
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| 68 | 68 | | list of the situations in which a contract is or is not principally |
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| 69 | 69 | | for the construction or repair of an improvement to real property |
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| 70 | 70 | | located in this state.] |
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| 71 | 71 | | SECTION 3. The changes in law made by this Act apply only to |
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| 72 | 72 | | a contract, or an agreement collateral to or affecting a contract, |
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| 73 | 73 | | entered into on or after the effective date of this Act. A |
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| 74 | 74 | | contract, or an agreement collateral to or affecting a contract, |
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| 75 | 75 | | entered into before the effective date of this Act is governed by |
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| 76 | 76 | | the law as it existed immediately before the effective date of this |
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| 77 | 77 | | Act, and that law is continued in effect for that purpose. |
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| 78 | 78 | | SECTION 4. This Act takes effect September 1, 2017. |
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