The Texas Legislature is underway and heading towards May 31, 2021, when the Regular Session will end.  We are also fast approaching the deadline by which bills and resolutions, other than local and emergency bills, must be filed which is March 12, 2021.  Here are three pending pieces of legislation which may be of particular interest to members of the construction industry.

1. Contractor Liability SB 219 – Civil Liability and Responsibility for the Consequences of Defects in Plans, Specifications, or Related Documents for Construction and Repair of Real Property Improvements (Companion Bill: HB 1418). This bill would amend the Business & Commerce Code to establish that a contractor would not be responsible for the consequences of defects in, and may not warranty the accuracy, adequacy, sufficiency, or suitability of, plans, specifications, or other design or bid documents for the construction or repair of any improvement to real property provided to the contractor by the person with whom the contractor entered into the contract. SB 219 also would require a contractor to make a written disclosure to the other contracting party of the existence of any known defect in the plans, specifications, or other design or bid documents discovered by the contractor before or during construction. The bill would also establish that a contractor who fails to disclose such a condition may be liable for defects that result from the failure to disclose. Further, SB 219 would prohibit these protections from being waived by contract. SB 219 would also amend the Government Code to prohibit an applicable governmental entity from requiring in a contract for engineering or architectural services related to the construction or repair of an improvement to real property, or in a contract related to the construction or repair of an improvement to real property that contains engineering or architectural services as a component part, that such services be performed to a level of professional skill and care beyond that which would be provided by an ordinarily prudent engineer or architect with the same professional license under the same or similar circumstances. The bill would not prevent a party to a contract for engineering or architectural services from enforcing specific obligations in the contract that are separate from the standard of care.

Both SB 219 and its companion bill HB 1418 have been filed but neither has been referred to a committee for public hearing at this time.

2. HB 2086 – Appeals of Denials of Summary Judgments: This bill would amend Section 51.014 of the Civil Practice and Remedies Code (CPRC) to authorize the interlocutory appeal of an order denying a motion for summary judgment filed by certain contractors, specifically contractors who perform work for The Texas Department of Transportation.  A contractor who performs work for TxDOT would be permitted to appeal the denial of summary judgment cases arising out of the conduct of a contractor who constructs or repairs a highway, road, or street for the Texas Department of Transportation if, at the time of the personal injury, property damage, or death, the contractor was in compliance with contract documents material to the condition or defect that was the proximate cause of the personal injury, property damage, or death.  This is intended to protect contractors who are just following the plans provided by TxDot.

HB 2086 has been filed but has not been referred to committee for public hearing at this time.

3. Summary: HB 1358—Recovery of Attorney’s Fees. This bill would amend section 38.001 of the CPRC to provide that a person may recover reasonable attorney’s fees “from an individual, an organization, the state, or an agency or institution of the state..”. HB 1358 further provides that the term “organization” has the meaning assigned by section 1.002 of the Business Organizations Code, which defines “organization” as “a corporation, limited or general partnership, limited liability company, business trust, real estate investment trust, joint venture, joint stock company, cooperative, association, bank, insurance company, credit union, savings and loan association, or other organization, regardless of whether the organization is for-profit, nonprofit, domestic, or foreign. This can impact whether a contractor who uses an LLC or LLP can be held liable for attorney’s fees in a case.

HB 1358 has been filed but has not been referred to a committee for public hearing at this time.

Our attorneys in Dallas and Austin are available to answer any questions you may have about new legislation affecting contractors. You may contact us at info@gstexlaw.com.

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