86R2381 AJA-D
By: Leach H.B. No. 1999
A BILL TO BE ENTITLED
AN ACT
relating to certain construction liability claims concerning
public buildings and public works.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subtitle F, Title 10, Government Code, is
amended by adding Chapter 2272 to read as follows:
CHAPTER 2272. CERTAIN CONSTRUCTION LIABILITY CLAIMS
Sec. 2272.001. DEFINITIONS. In this chapter:
(1) "Action" means a court or judicial proceeding or
an arbitration. The term does not include an administrative
action.
(2) "Construction" includes:
(A) the initial construction of an improvement to
real property;
(B) the construction of an addition to an
improvement to real property; or
(C) the repair, alteration, or remodeling of an
improvement to real property.
(3) "Construction defect" means a deficiency in the
construction of an improvement to real property, including a
deficiency in or arising out of the design, specifications,
surveying, planning, or supervision of the construction, that is
the result of:
(A) the use of defective materials, products, or
components in the construction;
(B) a violation of a building code applicable by
law to the construction;
(C) a failure of the design of an improvement to
real property to meet the professional standards of care applicable
at the time of governmental approval of the design or as otherwise
applicable if no governmental approval of the design was required
or obtained; or
(D) a failure to perform the construction in
accordance with the accepted trade standards for good and
workmanlike construction.
(4) "Contractor" means a person legally engaged in the
business of designing, developing, constructing, manufacturing,
repairing, altering, or remodeling improvements to real property.
(5) "Design professional" means a person licensed as
an architect, interior designer, landscape architect, engineer,
surveyor, or geologist.
(6) "Governmental entity" means:
(A) the state;
(B) a municipality, county, public school
district, or special-purpose district or authority;
(C) a district, county, or justice of the peace
court;
(D) a board, commission, department, office, or
other agency in the executive branch of state government, including
an institution of higher education as defined by Section 61.003,
Education Code;
(E) the legislature or a legislative agency; or
(F) the Supreme Court of Texas, the Texas Court
of Criminal Appeals, a court of appeals, or the State Bar of Texas
or another judicial agency having statewide jurisdiction.
(7) "Subcontractor" means a contractor directly
retained and compensated by another contractor to perform labor or
perform labor and supply materials in the construction.
(8) "Supplier" means a person who provides only
materials, equipment, or other supplies for the construction.
Sec. 2272.002. APPLICABILITY OF CHAPTER. (a) This chapter
applies only to a claim:
(1) for:
(A) damages arising from damage to or loss of
real or personal property caused by an alleged construction defect
in an improvement to real property that is a public building or
public work; or
(B) indemnification for damages described by
Paragraph (A);
(2) asserted by a governmental entity with an interest
in the public building or public work affected by the alleged
construction defect, including a governmental entity whose
interest arose from the purchase of the affected public building or
public work after any relevant construction contract was entered
into or relevant activity was performed; and
(3) asserted against a contractor, subcontractor,
supplier, or design professional.
(b) This chapter does not apply to:
(1) a claim for personal injury, survival, or wrongful
death;
(2) a claim involving the construction of residential
property covered under Chapter 27, Property Code;
(3) a contract entered into by the Texas Department of
Transportation; or
(4) a project that receives money from a state or
federal highway fund.
Sec. 2272.003. INSPECTION AND REPORT. (a) Before bringing
an action asserting a claim to which this chapter applies, the
governmental entity must obtain from an independent third-party
licensed professional engineer an inspection of the improvement
affected by the alleged construction defect and a written report
that:
(1) identifies the specific construction defect on
which the claim is based;
(2) describes the present physical condition of the
affected improvement; and
(3) describes any modification, maintenance, or
repairs to the improvement made by the governmental entity or
others.
(b) The governmental entity must provide written notice of
the inspection required by this section to each party who is subject
to the claim not later than the 10th day before the date the
inspection will occur. The notice must:
(1) identify the engineer who will conduct the
inspection and prepare the report;
(2) identify each specific area of the improvement to
be inspected; and
(3) include the date and time the inspection will
occur.
(c) Each party subject to the claim or the party's
representative may attend the inspection required by this section.
Sec. 2272.004. OPPORTUNITY TO CORRECT. Before bringing an
action asserting a claim to which this chapter applies, the
governmental entity must allow each party subject to the claim at
least 150 days after the date the report required by Section
2272.003 is provided to the party to inspect and correct any
construction defect or related condition identified in the report.
Sec. 2272.005. TOLLING OF LIMITATIONS PERIOD. If the
notice of inspection required by Section 2272.003 is provided
during the final year of the limitations period applicable to the
claim, the limitations period is tolled until the first anniversary
of the date on which the notice is provided.
Sec. 2272.006. ABATEMENT; DISMISSAL. (a) If a
governmental entity brings an action asserting a claim to which
this chapter applies without complying with Sections 2272.003 and
2272.004, the court, arbitrator, or other adjudicating authority
may abate the action for not more than one year on a showing that the
governmental entity bringing the action intends to comply with
those sections.
(b) Except as provided by Subsection (a), if a governmental
entity brings an action asserting a claim to which this chapter
applies without complying with Sections 2272.003 and 2272.004, the
court, arbitrator, or other adjudicating authority shall dismiss
the action. The dismissal may be with prejudice at the discretion
of the court, arbitrator, or other adjudicating authority.
Sec. 2272.007. RECOVERY OF INSPECTION COSTS. If an
inspection and report obtained by a governmental entity under
Section 2272.003 identifies a construction defect for which the
governmental entity recovers damages, the damages awarded to the
governmental entity against the party responsible for that
construction defect may include amounts paid by the governmental
entity to obtain the inspection and report with respect to
identification of that construction defect.
Sec. 2272.008. EMERGENCY REPAIRS BY GOVERNMENTAL ENTITY.
This chapter does not prohibit or limit a governmental entity from
making emergency repairs to the property as necessary to protect
the health, safety, and welfare of the public or a building
occupant.
Sec. 2272.009. INSURANCE TREATMENT OF CLAIM. If a party, in
connection with a potential claim against the party, receives a
written notice of an alleged construction defect or a report under
Section 2272.003 identifying a construction defect and provides the
notice or report to the party's insurer, the insurer shall treat the
provision of the notice or report to the party as the filing of a
suit asserting that claim against the party for purposes of the
relevant policy terms.
SECTION 2. (a) Chapter 2272, Government Code, as added by
this Act, applies only to a cause of action that accrues on or after
the effective date of this Act.
(b) Section 2272.009, Government Code, as added by this Act,
applies only to an insurance policy delivered, issued for delivery,
or renewed on or after January 1, 2020.
SECTION 3. 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, 2019.