87R16494 AJA-F
By: Leach, et al. H.B. No. 1418
Substitute the following for H.B. No. 1418:
By: Krause C.S.H.B. No. 1418
A BILL TO BE ENTITLED
AN ACT
relating to civil liability and responsibility for the consequences
of defects in the plans, specifications, or related documents for
the construction or repair of an improvement to real property.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Title 4, Business & Commerce Code, is amended by
adding Chapter 59 to read as follows:
CHAPTER 59. RESPONSIBILITY FOR DEFECTS IN PLANS AND SPECIFICATIONS
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 59.0001. DEFINITIONS. In this chapter:
(1) "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.
(2) "Contractor" means a person engaged in the
business of developing, constructing, fabricating, repairing,
altering, or remodeling improvements to real property.
(3) "Critical infrastructure facility" has the
meaning assigned by Section 423.0045, Government Code, provided
that the absence of fencing or signage described in the definition
provided by that section does not disqualify an item listed in that
definition from being classified or treated as a critical
infrastructure facility for purposes of this chapter. The term
includes:
(A) pipelines and pipeline appurtenances or
facilities, including pipes, valves, meters, pumps, compressors,
treating and processing facilities, cathodic protection
facilities, and any other equipment, facilities, devices,
structures, and buildings used or intended for use in the
gathering, transportation, treating, or processing of oil, gas, or
other minerals, and the liquefied or gaseous substances,
constituents, products, or mixtures derived from those minerals
through refining, processing, or other methods;
(B) utility-scale equipment or facilities to
transmit or distribute electricity; and
(C) utility-scale water storage facilities.
(4) "Design-build contract" means a contract in which
a single contractor agrees to:
(A) construct, repair, alter, or remodel an
improvement to real property; and
(B) be responsible for the development of plans,
specifications, or other design or bid documents used by the
contractor to construct, repair, alter, or remodel the improvement.
(5) "Subcontractor" means a contractor directly
retained and compensated by another contractor to perform labor or
perform labor and supply materials in the construction.
SUBCHAPTER B. CONTRACTOR RESPONSIBILITY
Sec. 59.0051. APPLICABILITY OF SUBCHAPTER. (a) This
subchapter applies only to a contract for the construction or
repair of an improvement to real property.
(b) This subchapter does not apply to a contract entered
into by a person for the construction or repair of a critical
infrastructure facility owned or operated by the person or any
building, structure, improvement, appurtenance, or other facility
owned by the person that is necessary to the operation of and
directly related to the critical infrastructure facility. For
purposes of this subsection, "person" includes a parent,
subsidiary, affiliated entity, joint venture partner, or owner of
the person.
(c) This chapter does not apply to the construction, repair,
alteration, or remodeling of an improvement to real property if:
(1) the construction, repair, alteration, or
remodeling is performed under a design-build contract; and
(2) the part of the plans, specifications, or other
design or bid documents for which the contractor is responsible
under the contract is the part alleged to be defective.
Sec. 59.0052. LIMITATION ON CONTRACTOR'S LIABILITY AND
RESPONSIBILITY FOR CERTAIN DEFECTS. (a) A contractor is not
responsible for the consequences of defects in and may not warranty
the accuracy, adequacy, sufficiency, or suitability of plans,
specifications, or other design or bid documents provided to the
contractor by:
(1) the person with whom the contractor entered into
the contract; or
(2) another person on behalf of the person with whom
the contractor entered into the contract.
(b) A contractor must, within a reasonable time of learning
of the defect, disclose in writing to the person with whom the
contractor enters into a contract the existence of any known defect
in the plans, specifications, or other design or bid documents that
is discovered by the contractor before or during construction.
(c) A contractor who fails to disclose a condition as
required by Subsection (b) may be liable for the consequences of
defects that result from the failure to disclose.
Sec. 59.0053. STANDARD OF CARE FOR CERTAIN DESIGNS. Design
services provided under a design-build contract are subject to the
same standard of care requirements provided in Section 130.0021,
Civil Practice and Remedies Code.
Sec. 59.0054. WAIVER PROHIBITED. This subchapter may not
be waived by a contractor, subcontractor, or owner. A purported
waiver of this subchapter in violation of this section is void.
SECTION 2. The heading to Chapter 130, Civil Practice and
Remedies Code, is amended to read as follows:
CHAPTER 130. LIABILITY PROVISIONS [INDEMNIFICATION] IN CERTAIN
CONSTRUCTION CONTRACTS
SECTION 3. Chapter 130, Civil Practice and Remedies Code,
is amended by adding Section 130.0021 to read as follows:
Sec. 130.0021. ARCHITECT'S OR ENGINEER'S STANDARD OF CARE.
(a) A construction contract for architectural or engineering
services or a contract related to the construction or repair of an
improvement to real property that contains architectural or
engineering services as a component part must require that the
architectural or engineering services be performed with the
professional skill and care ordinarily provided by competent
architects or engineers practicing under the same or similar
circumstances and professional license.
(b) If a contract described by Subsection (a) contains a
provision establishing a different standard of care than the
standard described by Subsection (a):
(1) the provision is void and unenforceable; and
(2) the standard of care described by Subsection (a)
applies to the performance of the architectural or engineering
services.
(c) Section 130.004 does not limit the applicability of this
section.
SECTION 4. Section 130.004, Civil Practice and Remedies
Code, is amended to read as follows:
Sec. 130.004. OWNER OF INTEREST IN REAL PROPERTY. (a)
Except as provided by Section 130.002(b) or 130.0021, this chapter
does not apply to an owner of an interest in real property or
persons employed solely by that owner.
(b) Except as provided by Section 130.002(b) or 130.0021,
this chapter does not prohibit or make void or unenforceable a
covenant or promise to:
(1) indemnify or hold harmless an owner of an interest
in real property and persons employed solely by that owner; or
(2) allocate, release, liquidate, limit, or exclude
liability in connection with a construction contract between an
owner or other person for whom a construction contract is being
performed and a registered architect or licensed engineer.
SECTION 5. (a) The changes in law made by this Act apply
only to a contract entered into on or after the effective date of
this Act. A contract entered into before the effective date of this
Act is governed by the law in effect when the contract was entered
into, and the former law is continued in effect for that purpose.
(b) An original contract for the construction or repair of
an improvement to real property with the owner of an interest in
real property that is entered into before the effective date of this
Act, and a subcontract or purchase order for providing labor or
materials associated with that original contract, whether the
subcontract or purchase order is entered into before, on, or after
the effective date of this Act, is governed by the law in effect
when the original contract was entered into, and the former law is
continued in effect for that purpose.
SECTION 6. This Act takes effect September 1, 2021.