The Texas Legislature went into Session on January 14^th until June 2^nd.  There are numerous bills filed which have a general interest such as ad valorum tax revisions and school finance.  This review of recently filed bills will focus on potential legislation which could be of interest to the construction industry.

Administrative Law

 HB 606 – De Novo Review and Interpretation of State Laws and Agency Rules by Reviewing Court Judges

Summary: HB 606, filed by Rep. Brian Harrison (R – Midlothian), would require a judge or administrative law judge (ALJ) to interpret a statute, rule, or other guidance issued by a state agency de novo, without deference to an agency’s interpretation of the provision. HB 606 would also require a judge or ALJ to resolve the question of an ambiguous provision of state law in favor of limiting state agency authority.

Damages

Several bills have been introduced as part of Tort Reform to limit the amounts which can be recovered in personal injury cases.

HB 939 – Liability Limits for Non-Economic Damages in Personal Injury Claims

Summary: HB 939, filed by Rep. Cody Vasut (R – Angleton), would amend Chapter 41 of the Civil Practice and Remedies Code (CPRC) and limit the civil liability of a defendant for noneconomic damages in personal injury cases to an amount not to exceed, for each claimant, the greater of five times the economic damages or $5 million.

HB 1419 – Liability Limits for Non-Economic Damages in Personal Injury and Wrongful Death Cases

Summary: HB 1419, filed by Rep. Mano DeAyala (R – Houston), would amend Chapter 41 of the CPRC and limit civil liability to a claimant for noneconomic damages in personal injury cases to an amount not to exceed:

 – For noneconomic damages awarded as damages for past and future physical pain and suffering, three times the amount awarded to a claimant as damages for past and future health care expenses; and

 –  For noneconomic damages awarded as damages for past and future mental or emotional pain or anguish: (1) $1 million if the claim arises from an event primarily causing emotional injury to the claimant; or (2) $250,000 if the claim arises from an event primarily causing bodily injury to the claimant.

For purposes of the limitations provided under new subsection 41.0025(a), all persons that may be responsible under a vicarious liability theory for satisfying a judgment are treated as a single defendant.

HB 1419 would also amend Chapter 71 of the CPRC and limit the civil liability for noneconomic damages in an amount not to exceed $1 million for each claimant as damages for past and future mental or emotional pain or anguish. For purposes of the limitations provided under new subsection 71.0105(a), all persons that may be responsible under a vicarious liability theory for satisfying a judgment are treated as a single defendant.

Beginning on January 1, 2027, and continuing January 1 of each subsequent year, the fixed-amount limitation provided by the amendments to Chapter 41 and 71 would increase by 1.75 percent from the prior year’s amount.

 Construction Matters

SB 1040 – Related to Voidable Provisions in certain construction contracts

Summary: SB 1040 would require that if a contract between and Owner and Contractor or a Contractor and Subcontractor attempts to incorporate by reference terms and conditions of other agreements that the other agreement must be provided on or before the 10th day before the contract is signed.  The law will allow certain provisions of the original contract to be redacted.  The law would not require the production of publicly referenced material.  There are also some exceptions if there is an emergency or an internet link to the referenced document is included.

HB 2021 – Relating to certain construction liability claims.

Summary: HB 2021 would provide some additional protections for contractors, subcontractors, suppliers and design provisions for certain “Critical Infrastructure Facilities” (generally defined as oil and gas and energy facilities) for (1)  damages arising from damage to or loss of real or personal property caused by an alleged construction defect in an improvement to real property that is a private construction contract exceeding $10 million; (2)  indemnity or contribution for damages; (3)  asserted by a private owner with an interest in the construction contract affected by the alleged construction defect; and (4)  asserted against a contractor, subcontractor, supplier, or design professional.

SB 338 – Relating to required provisions of workers’ compensation insurance coverage for employees of building and construction contractors and subcontractor.

Summary: SB 338 would require a governmental entity that enters into a building construction contract to require a contractor to certify in writing that the contractor and subcontractor to provide workers’ compensation insurance coverage for each employee of the contractor.  And a  subcontractor shall provide workers’ compensation insurance coverage for each employee of the subcontractor.

HB 2484 -Relating to an account for construction retainage.

Summary: HB 2484 would require that 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.  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.

HB 882 – relating to building codes applicable in the unincorporated areas of a county; authorizing a fee.

Summary: HB 882 would provide that except as otherwise provided, new commercial construction in the unincorporated area of a county to which this subchapter applies shall conform to the International Building Code as it existed on January 1, 2025.  New residential construction [of a single-family house or duplex] in the unincorporated area of a county to which this subchapter applies shall conform to the version of the International Residential Code as it existed on January 1, 2025.  The commissioners court of a county may:

(1)  adopt and apply a version of the International Residential Code or the International Building Code published after January 1, 2025, to new construction; or

(2)  establish standards for new construction that exceed the standards of those codes.

A county may also employ a building inspector certified by the International Code Council to review construction plans and inspect new construction or shall require and for new residential construction on a vacant lot and for construction of an addition to an existing residence, require:

          (1)  the builder of new residential construction to contract for inspection  with:

(A) [(i)]  a licensed engineer;

(B) [(ii)]  a registered architect;

(C) [(iii)  a plumbing inspector employed by a municipality and licensed by the Texas State Board of Plumbing Examiners.

The attorneys in our Austin and Dallas office carefully monitor legislative developments that impact the design and construction industries. Please contact us at info@gstexlaw.com with any questions you may have.

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