87R25597 AJA-F
By: Hughes S.B. No. 219
(Leach, Gervin-Hawkins, Lucio III, Holland, et al.)
Substitute the following for S.B. No. 219: No.
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. 59.001. 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" includes:
(A) a petroleum or alumina refinery;
(B) an electrical power generating facility,
substation, switching station, or control center;
(C) a chemical, polymer, or rubber manufacturing
facility;
(D) a water intake structure, water treatment
facility, wastewater treatment plant, or pump station;
(E) a natural gas compressor station;
(F) a liquid natural gas terminal or storage
facility;
(G) a telecommunications central switching
office or any structure used as part of a system to provide wired or
wireless telecommunications services;
(H) a port, railroad switching yard, trucking
terminal, or other freight transportation facility;
(I) a gas processing plant, including a plant
used in the processing, treatment, or fractionation of natural gas;
(J) a transmission facility used by a federally
licensed radio or television station;
(K) a steelmaking facility that uses an electric
arc furnace to make steel;
(L) a dam that is classified as a high hazard by
the Texas Commission on Environmental Quality;
(M) a concentrated animal feeding operation, as
defined by Section 26.048, Water Code;
(N) any portion of an aboveground oil, gas, or
chemical pipeline;
(O) an oil or gas drilling site;
(P) a group of tanks used to store crude oil, such
as a tank battery;
(Q) an oil, gas, or chemical production facility;
(R) an oil or gas wellhead;
(S) any oil and gas facility that has an active
flare;
(T) 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, storage, or processing of
CO2, 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;
(U) utility-scale equipment or facilities to
transmit or distribute electricity;
(V) utility-scale water or wastewater storage,
treatment, or transmission facilities;
(W) facilities used to manufacture or produce
transportation fuels and similar products, including gasoline,
kerosene, distillate fuel oils, residual fuel oils, lubricants,
asphalt, propane, ethanol, biodiesel, and renewable diesel; and
(X) commercial airport facilities used for the
landing, parking, refueling, shelter, or takeoff of aircraft,
maintenance or servicing of aircraft, aircraft equipment storage,
or navigation of aircraft.
(4) "Design" means work that is required under Title
6, Occupations Code, to be performed by or under the supervision of
a person licensed or registered under the statute.
(5) "Design-build contract" means a contract in which
a 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 documents used by the contractor to
construct, repair, alter, or remodel the improvement.
(6) "Engineering, procurement, and construction
contract" means a construction contract where the contractor is
responsible for all of the engineering, procurement, and
construction activities to deliver the completed project.
Sec. 59.002. APPLICABILITY OF CHAPTER. (a) This chapter
applies only to a contract for the construction or repair of an
improvement to real property.
(b) This chapter 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" has the meaning assigned by
Section 311.005, Government Code, and includes a parent,
subsidiary, affiliated entity, joint venture partner, or owner of
the person.
(c) Except as provided by Section 59.052, 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 the part
of the plans, specifications, or other design documents for which
the contractor is responsible under the contract is the part
alleged to be defective; or
(2) the construction, repair, alteration, or
remodeling is performed under an engineering, procurement, and
construction contract and the part of the plans, specifications, or
other design documents for which the contractor is responsible
under the contract is the part alleged to be defective.
(d) Except as provided by Section 59.052, this chapter does
not apply to the portion of a contract between a person and a
contractor under which the contractor agrees to provide input and
guidance on plans, specifications, or other design documents to the
extent that:
(1) the contractor's input and guidance are provided
as the signed and sealed work product of a person licensed or
registered under Title 6, Occupations Code; and
(2) the work product is incorporated into the plans,
specifications, or other design documents used in construction.
Sec. 59.003. WAIVER PROHIBITED. This chapter may not be
waived. A purported waiver of this chapter in violation of this
section is void.
SUBCHAPTER B. CONTRACTOR RESPONSIBILITY
Sec. 59.051. LIMITATION ON CONTRACTOR'S LIABILITY AND
RESPONSIBILITY FOR CERTAIN DEFECTS. (a) A contractor is not
responsible for the consequences of design defects in and may not
warranty the accuracy, adequacy, sufficiency, or suitability of
plans, specifications, or other design documents provided to the
contractor by a person other than the contractor's agents,
contractors, fabricators, or suppliers, or its consultants, of any
tier.
(b) A contractor must, within a reasonable time of learning
of a defect, inaccuracy, inadequacy, or insufficiency in the plans,
specifications, or other design documents, 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 documents that is discovered by the contractor, or
that reasonably should have been discovered by the contractor using
ordinary diligence, before or during construction. In this
subsection, ordinary diligence means the observations of the plans,
specifications, or other design documents or the improvement to
real property that a contractor would make in the reasonable
preparation of a bid or fulfillment of its scope of work under
normal circumstances. Ordinary diligence does not require that the
contractor engage a person licensed or registered under Title 6,
Occupations Code, or any other person with specialized skills. A
disclosure under this subsection is made in the contractor's
capacity as contractor and not as a licensed professional under
Title 6, Occupations Code.
(c) A contractor who fails to disclose a defect as required
by Subsection (b) may be liable for the consequences of defects that
result from the failure to disclose.
Sec. 59.052. STANDARD OF CARE FOR CERTAIN DESIGNS. Design
services provided under a contract described by Section 59.002(c)
or (d) are subject to the same standard of care requirements
provided in Section 130.0021, Civil Practice and Remedies Code.
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.