| 1 | 1 | | 89R4717 PRL-D |
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| 2 | 2 | | By: Curry H.B. No. 2484 |
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| 3 | 3 | | |
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| 4 | 4 | | |
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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 an account for construction retainage. |
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| 10 | 10 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 11 | 11 | | SECTION 1. Title 4, Business & Commerce Code, is amended by |
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| 12 | 12 | | adding Chapter 60 to read as follows: |
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| 13 | 13 | | CHAPTER 60. ACCOUNT FOR CONSTRUCTION RETAINAGE |
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| 14 | 14 | | Sec. 60.001. DEFINITIONS. In this chapter: |
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| 15 | 15 | | (1) "Construction contract" has the meaning assigned |
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| 16 | 16 | | by Section 272.0001. |
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| 17 | 17 | | (2) "Retainage" is an amount or agreed percentage of |
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| 18 | 18 | | money in a construction contract between a contractor and a |
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| 19 | 19 | | subcontractor that is withheld from a payment and not due to be paid |
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| 20 | 20 | | until completion of the contract or on an agreed date. |
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| 21 | 21 | | Sec. 60.002. ESCROW ACCOUNT FOR RETAINAGE. If a |
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| 22 | 22 | | construction contract or an agreement collateral to or affecting |
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| 23 | 23 | | the construction contract contains a provision providing for |
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| 24 | 24 | | retainage, the contractor shall deposit and hold any retainage in |
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| 25 | 25 | | an escrow account. Money in the escrow account is available to |
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| 26 | 26 | | satisfy the contractor's obligation to a subcontractor. |
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| 27 | 27 | | Sec. 60.003. LATE PAYMENT. If a contractor does not satisfy |
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| 28 | 28 | | the contractor's obligation to the subcontractor within three |
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| 29 | 29 | | months after the date the subcontractor completes performance due |
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| 30 | 30 | | under the construction contract, the contractor is liable to the |
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| 31 | 31 | | subcontractor in an amount equal to the sum of: |
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| 32 | 32 | | (1) the original obligation; and |
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| 33 | 33 | | (2) three percent of the original obligation. |
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| 34 | 34 | | SECTION 2. The changes in law made by this Act apply only to |
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| 35 | 35 | | a contract that is entered into or renewed on or after the effective |
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| 36 | 36 | | date of this Act. A contract entered into before the effective date |
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| 37 | 37 | | of this Act is governed by the law in effect on the date the contract |
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| 38 | 38 | | was entered into, and the former law is continued in effect for that |
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| 39 | 39 | | purpose. |
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| 40 | 40 | | SECTION 3. This Act takes effect September 1, 2025. |
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