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June 20, 2007 | |
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The curtain has dropped on the 80th Texas Legislature. It was a successful session for AGC Texas Building Branch, and a number of bills significant to our industry were signed into law by the Governor.
"The Fat Lady Sings" Final As more residential condominium projects are being built in Texas cities, the passage of HB 3147 (condominium construction defects claims) is especially timely. The bill by Representative Solomons and Senator Carona clears up uncertainties surrounding construction defects claims on common elements of a residential condominium. While the law had been very clear that claims involving individual residential units were to be resolved under Chapter 27 of the Property Code (or RCLA - the Residential Construction Liability Act), the law was silent about the condominium’s common elements. As of September 1, 2007, any construction defect claim on a common element will be handled under RCLA in the same manner as a claim from an individual unit owner. AGC Texas Building Branch continued its success in advancing the rights of contractors who may find themselves in dispute with a governmental entity that claims sovereign immunity. In 2005, following conflicting court decisions as to whether cities and school districts were immune from suit, AGC was instrumental in passing a law clarifying that cities and school districts could not claim sovereign immunity. Subsequently, some public entities began writing contracts in a manner that would allow them to recover attorneys’ fees if they prevailed in court, but denying recovery to the contractor if the contractor won. This session, HB 1268 by Representative Van Arsdale and Senator Rodney Ellis (and signed by the Governor) will allow contractors to receive attorneys’ fees in cases where they prevail if the contract stipulates that the government would receive fees if they had prevailed. This levels the playing field once again for Texas contractors. The theft of certain metals, especially copper, on construction sites has seen an alarming increase in recent months. HB 1766 by Representative Pena and Senator Carona stiffens the penalties for theft of copper, aluminum and bronze. The State’s penal code has been amended to make it a state jail felony if the value of the stolen property is under $20,000 and is at least 50% copper, aluminum or bronze. The increased penalty for these thefts goes into effect on September 1, 2007. Protection of children from sexual predators and child abuse was a priority for the Legislature this session, particularly in light of the TYC fiasco. SB 9 (safe school bill) by Senator Shapiro and Representative Branch, will require criminal background checks (including fingerprinting) for all certified public school employees and employees of companies that have a contract with a school. AGC worked with the bill sponsors to clarify that a contractor’s employees who are in a secure work area and do not venture into areas where students are present will not be required to have a background check. Additionally, contractors who respond to an emergency service call will not be required to have a background check as long as they are accompanied on their work by a school district employee. HB 2625 by Representative Murphy and Senator Hegar will be of interest in areas where the Davis-Bacon wage rate surveys are not adjusted in a timely manner. Currently, state law allows local political subdivisions to use locally adjusted Davis-Bacon wage rates in lieu of conducting their own surveys as long as the wage rates were determined within a three-year period of the bidding date. The cost of a wage-rate survey can be very expensive. To provide some relief, the new law effective September 1, 2007 eliminates the provision that called for the Davis-Bacon survey to be done within the previous three years. |
SUCCESS STORIES-PART 2
AGC won a major defensive battle when none of three bills relating to
the use of additional insured and indemnification clauses in
construction contracts was passed by the Legislature. There is no simple
solution to the complex issues of the use of indemnification clauses in
construction contracts, and AGC Texas Building Branch is committed to
crafting legislation of benefit to our members and the industry as a
whole for the next legislative session in 2009. |
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The Near Miss Vetoed by the Governor  The Legislature sent 1,481 bills to Governor Perry this session, and he ended up vetoing only 51 of them. Unfortunately, one of those was HB 447 (Public Alternative Delivery Consolidation) by Representative Callegari and Senator Mike Jackson. AGC received several indications that the Governor was going to sign this bill, or at the very least allow it to become law without his signature. It is a major disappointment to AGC that the Governor vetoed an important bill for AGC members. It would have consolidated alternative delivery procurement statutes into a single code; it included language to set needed qualifications for companies performing CM Agent work; it addressed issues involving the use of job order contracts and interlocal agreements, and it included language that would have helped minimize frivolous lawsuits with alleged claims of construction defects. AGC Texas Building Branch and some AGC members will visit with the Governor to hear his concerns and express our disappointment over his actions on this bill. | |
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The passage of SB 324 (contingent payment
bill) by Senator Deuell and Representative Chisum concludes work on an issue
that has been a source of contention for decades. In late 2001, AGC Texas
Building Branch and Texas Construction Association resolved to work together
for a legislative solution to the use of contingent payment clauses in
construction contracts. Although it required three legislative sessions to
shepherd the bill through the process, the task was completed with the
Governor’s signature on SB 324 on June 16. The bill recognizes the validity
of the use of contingent payment clauses, but provides procedures that must
be followed when there are bumps in the road. (Applies to contracts entered
into on or after 9-1-07.) Later this summer there will
be a booklet available explaining this new law.
Initially, AGC opposed HB
2014 and companion SB 354 relating to Consolidated Insurance Programs.
By the end of the session, the language had been revised so that it
received AGC support, but it simply did not have enough time to be
passed by the Legislature. AGC plans to work on a bill for the 81st
Legislative Session that will address
many concerns over the use of OCIPs and ROCIPs.