| 1 | 1 | | 89R11482 SCR-F |
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| 2 | 2 | | By: Bell of Kaufman H.B. No. 3290 |
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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 the time period for which certain funds payable under a |
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| 10 | 10 | | construction contract must be reserved for the benefit of |
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| 11 | 11 | | mechanic's lien claimants. |
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| 12 | 12 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 13 | 13 | | SECTION 1. Section 53.101, Property Code, is amended by |
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| 14 | 14 | | amending Subsection (a) and adding Subsection (a-1) to read as |
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| 15 | 15 | | follows: |
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| 16 | 16 | | (a) During the progress of work under an original contract |
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| 17 | 17 | | for which a mechanic's lien may be claimed and for the period |
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| 18 | 18 | | described by Subsection (a-1) [30 days after the work under the |
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| 19 | 19 | | contract is completed], the owner shall reserve: |
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| 20 | 20 | | (1) 10 percent of the contract price of the work to the |
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| 21 | 21 | | owner; or |
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| 22 | 22 | | (2) 10 percent of the value of the work, measured by |
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| 23 | 23 | | the proportion that the work done bears to the work to be done, |
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| 24 | 24 | | using the contract price or, if there is no contract price, using |
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| 25 | 25 | | the reasonable value of the completed work. |
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| 26 | 26 | | (a-1) After the completion of work under an original |
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| 27 | 27 | | contract for which a mechanic's lien may be claimed, the owner shall |
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| 28 | 28 | | reserve the funds described by Subsection (a) for a period ending |
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| 29 | 29 | | the earlier of: |
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| 30 | 30 | | (1) the 31st day after the date the work under the |
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| 31 | 31 | | contract is completed; or |
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| 32 | 32 | | (2) the 61st day after the date: |
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| 33 | 33 | | (A) a certificate of occupancy is issued for the |
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| 34 | 34 | | improvement; or |
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| 35 | 35 | | (B) the improvement is first used for its |
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| 36 | 36 | | intended purpose. |
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| 37 | 37 | | SECTION 2. The changes in law made by this Act apply only to |
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| 38 | 38 | | a contract entered into on or after the effective date of this Act. |
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| 39 | 39 | | A contract entered into before the effective date of this Act is |
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| 40 | 40 | | governed by the law as it existed immediately before the effective |
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| 41 | 41 | | date of this Act, and that law is continued in effect for that |
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| 42 | 42 | | purpose. |
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| 43 | 43 | | SECTION 3. This Act takes effect September 1, 2025. |
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