An old joke in Texas is that the drafters of the Texas Constitution made a grave error, mistakenly requiring the Texas Legislature convene for 140 days every 2 years instead of 2 days every 140 years.  As the Texas Legislature stands on the precipice of convening its 87^th Session on January 12, 2021, we will begin a series of articles about bills being introduced into the Texas House or Senate that may impact the construction industry. We start our series with a look back at one of the more consequential bills, at least at it pertains to the construction industry and potential future Legislative action, passed in the prior, 86^th Legislative Session.

In 2019, the Texas Legislature passed House Bill 2899, a bill with narrow application, but still of great significance to design professionals and construction contractors in Texas. The Bill, which became law in 2019, impacts construction contractors’ civil liability for defects in design documents, but only on projects involving construction or repair of highways, roads, and related improvements.

Since 1907, Texas has followed the harsh rule established by the Texas Supreme Court in Lonergan v. San Antonio Loan & Trust Co. that, absent contract language to the contrary, contractors can be liable to project owners for design errors or omissions in construction documents prepared and issued by owner-retained design professionals.  Lonergan reflects an extreme interpretation of the doctrine of caveat emptor, buyer (in this case, contractor) beware.

For many years, construction contractors have sought to reverse or lessen the impact of Lonergan through legislative action.   For the most part, those efforts have failed.  House Bill 2899 reflected a rare victory in eroding Lonergan.  Although the Bill did not outright eliminate Lonergan, it imposed limitations on Lonergan’s applicability to highway, road, and related improvements. House Bill 2899 provides that contractors on highway construction projects are not liable for damage resulting from defects in the project specifications or from negligent acts of certain governmental entities or their hired design professionals.

In late 2019, The Texas House Speaker announced a series of “interim charges” for Texas House Committees. Interim charges are assignments passed down to chamber members to conduct research, hear testimony, and submit reports on important issues relating to passed legislation from prior sessions.  Using the charges, Texas lawmakers can make recommendations before the next legislative session begins and ensure the legislative intent of passed legislation is achieved.  As with many things in 2020, the COVID-19 pandemic has wreaked havoc on the upcoming Legislative session, delaying and outright preventing committees from conducting hearings on interim charges.

The interim charge relating to House Bill 2899 will examine the effects of the legislation on the public works-transportation sector.  The findings may pave the way for future bills that further erode the applicability of Lonergan to private sector and other public works projects, reallocating risk among owners and contractors to more closely resemble how the majority of other States already handle the issue.

The attorneys in our Austin and Dallas offices will be carefully monitoring the 87^th Legislative Session and are available to answer any questions you may have regarding interim charges or any bills being introduced to the House or Senate.

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