89R4717 PRL-D
By: Curry H.B. No. 2484
A BILL TO BE ENTITLED
AN ACT
relating to an account for construction retainage.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Title 4, Business & Commerce Code, is amended by
adding Chapter 60 to read as follows:
CHAPTER 60. ACCOUNT FOR CONSTRUCTION RETAINAGE
Sec. 60.001. DEFINITIONS. In this chapter:
(1) "Construction contract" has the meaning assigned
by Section 272.0001.
(2) "Retainage" is an amount or agreed percentage of
money in a construction contract between a contractor and a
subcontractor that is withheld from a payment and not due to be paid
until completion of the contract or on an agreed date.
Sec. 60.002. ESCROW ACCOUNT FOR RETAINAGE. If a
construction contract or an agreement collateral to or affecting
the construction contract contains a provision providing for
retainage, the contractor shall deposit and hold any retainage in
an escrow account. Money in the escrow account is available to
satisfy the contractor's obligation to a subcontractor.
Sec. 60.003. LATE PAYMENT. If a contractor does not satisfy
the contractor's obligation to the subcontractor within three
months after the date the subcontractor completes performance due
under the construction contract, the contractor is liable to the
subcontractor in an amount equal to the sum of:
(1) the original obligation; and
(2) three percent of the original obligation.
SECTION 2. The changes in law made by this Act apply only to
a contract that is entered into or renewed 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 on the date the contract
was entered into, and the former law is continued in effect for that
purpose.
SECTION 3. This Act takes effect September 1, 2025.