88R3409 SRA-F
By: Turner H.B. No. 2928
A BILL TO BE ENTITLED
AN ACT
relating to the payment or application of funds under construction
contracts.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. The heading to Section 272.001, Business &
Commerce Code, is amended to read as follows:
Sec. 272.001. VOIDABLE CONTRACT PROVISIONS [PROVISION].
SECTION 2. Section 272.001, Business & Commerce Code, is
amended by adding Subsection (c) to read as follows:
(c) If a construction contract contains a provision that
allows a party to the contract to wholly or partly withhold payment
owed under one contract to satisfy a claim or damages alleged under
another contract, that provision is voidable by the party whose
payment may be withheld under the provision.
SECTION 3. Section 28.003, Property Code, is amended by
adding Subsection (c) to read as follows:
(c) For purposes of this section, a good faith dispute does
not include a dispute relating to a contract, work order,
contractual arrangement, or any other agreement between the parties
that is not related to the contract for construction under which
payment is requested or required.
SECTION 4. Section 162.031, Property Code, is amended by
adding Subsection (a-1) to read as follows:
(a-1) A trustee who retains or otherwise diverts trust funds
due to a dispute, including an alleged default, arising under a
construction contract other than the contract in connection with
which the trust funds were received by or placed under the control
or direction of the trustee has misapplied the trust funds.
SECTION 5. Subchapter B, Chapter 162, Property Code, is
amended by adding Section 162.034 to read as follows:
Sec. 162.034. ATTORNEY'S FEES. The court may award costs
and reasonable attorney's fees in an action brought under this
subchapter.
SECTION 6. (a) Except as provided by Subsection (b) of this
section, the changes in law made by this Act apply only to a
contract that is entered into on or after the effective date of this
Act.
(b) Section 162.034, Property Code, as added by this Act,
applies only to an action commenced on or after the effective date
of this Act.
SECTION 7. This Act takes effect September 1, 2023.