pre-suit reports and repairs for more construction defect claims

The text as introduced · 1,232 words

By: Barry
H.B. No. 2021

A BILL TO BE ENTITLED

AN ACT

relating to certain construction liability claims.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 2272.001, Government Code, is amended to

read as follows:

Sec. 2272.001. DEFINITIONS.

(9) "Critical Infrastructure Facility" means

(a) The same as defined by Chapter 59 of the Business and

Commerce Code.

(b) For the purposes of this chapter, the definition of

"critical infrastructure facility" excludes the following:

(1) a natural gas compressor station;

(2) a liquid natural gas terminal or storage facility;

(3) a telecommunications central switching office or

any structure used as part of a system to provide wired or wireless

telecommunications services;

(4) a port, railroad switching yard, trucking

terminal, or other freight transportation facility;

(5) a transmission facility used by a federally

licensed radio or television station;

(6) a steelmaking facility that uses an electric arc

furnace to make steel;

(7) a dam that is classified as a high hazard by the

Texas Commission on Environmental Quality;

(8) any portion of an aboveground oil, gas, or

chemical pipeline;

(9) an oil or gas drilling site;

(10) a group of tanks used to store crude oil, such as

a tank battery;

(11) an oil or gas wellhead;

(12) any oil and gas facility that has an active flare;

and

(13) pipelines and pipeline appurtenances or

facilities, including pipes, valves, meters, pumps, compressors,

treating and processing facilities, cathodic protection

facilities, and any other equipment, facilities, devices,

structures, and buildings used or intended for use in the

gathering, transportation, treating, storage, or processing of

CO2, oil, gas, or other minerals, and the liquefied or gaseous

substances, constituents, products, or mixtures derived from those

minerals through refining, processing, or other methods.

SECTION 2. Chapter 2272, Government Code, is amended by

adding the following section:

Sec. 2272.002. APPLICABILITY OF CHAPTER

(a) 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 public building or public

work; or

(2) indemnity or contribution for damages described by

Paragraph (A);

(3) asserted by a governmental entity with an interest

in the public building or public work affected by the alleged

construction defect; and

(4) asserted against a contractor, subcontractor,

supplier, or design professional.

(b) (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 described by

Paragraph (B);

(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.

(c) This chapter does not apply to:

(1) a claim for personal injury, survival, or wrongful

death;

(2) a claim involving the construction of residential

property covered under Chapter 27, Property Code;

(3) a contract entered into by the Texas Department of

Transportation;

(4) a project that receives money from a state or

federal highway fund; or

(5) a civil works project as defined by Section

2269.351.

(5) a "critical infrastructure facility" as defined by

Sec. 2272.001 (9).

SECTION 3. Chapter 2272, Government Code, is amended by

adding the following section:

Sec. 2272.003. REPORT.

(a) Before bringing an action asserting a claim to which

this chapter applies, the governmental entity or private owner must

provide each party with whom the governmental entity or private

owner has a contract for the design or construction of an affected

structure a written report by certified mail, return receipt

requested, that clearly:

(1) identifies the specific construction defect on

which the claim is based;

(2) describes the present physical condition of the

affected structure; and

(3) describes any modification, maintenance, or

repairs to the affected structure made by the governmental entity

or private owner or others since the affected structure was

initially occupied or used.

(b) Not later than the fifth day after the date a contractor

receives a report under Subsection (a), the contractor must provide

a copy of the report to each subcontractor retained on the

construction of the affected structure whose work is subject to the

claim.

SECTION 4. Chapter 2272, Government Code, is amended by

adding the following section:

Sec. 2272.004. OPPORTUNITY TO INSPECT AND CORRECT.

(a) Before bringing an action asserting a claim to which

this chapter applies, the governmental entity or a party to a

private construction contract exceeding $10 million must allow each

party with whom the governmental entity or private owner has a

contract for the design or construction of an affected structure

and who is subject to the claim and any known subcontractor or

supplier who is subject to the claim:

(1) a reasonable opportunity to inspect any

construction defect or related condition identified in the report

for a period of 30 days after sending the report required by Section

2272.003; and

(2) at least 120 days after the inspection to:

(A) correct any construction defect or related

condition identified in the report; or

(B) enter into a separate agreement with the

governmental entity or private owner to correct any construction

defect or related condition identified in the report.

(b) The governmental entity or private owner is not required

to allow a party to make a correction or repair under Subsection (a)

if:

(1) the party:

(A) is a contractor and cannot provide payment

and performance bonds to cover the corrective work if applicable ;

(B) cannot provide liability insurance or

workers' compensation insurance;

(C) has been previously terminated for cause by

the governmental entity or private owner ; or

(D) has been convicted of a felony; or

(2) the governmental entity or private owner

previously complied with the process required by Subsection (a)

regarding a construction defect or related condition identified in

the report and:

(A) the defect or condition was not corrected as

required by Subsection (a)(2)(A) or an agreement under Subsection

(a)(2)(B); or

(B) the attempt to correct the construction

defect or related condition identified in the report resulted in a

new construction defect or related condition.

SECTION 5. Chapter 2272, Government Code, is amended by

adding the following section:

Sec. 2272.006. DISMISSAL.

(a) If a governmental entity or private owner brings an

action asserting a claim to which this chapter applies without

complying with Sections 2272.003 and 2272.004, the court,

arbitrator, or other adjudicating authority shall dismiss the

action without prejudice.

(b) If an action is dismissed without prejudice under

Subsection (a) and the governmental entity or private owner brings

a second action asserting a claim to which this chapter applies

without complying with Sections 2272.003 and 2272.004, the court,

arbitrator, or other adjudicating authority shall dismiss the

action with prejudice.

SECTION 6. Chapter 2272, Government Code, is amended by

adding the following section:

Sec. 2272.007. RECOVERY OF REPORT COSTS.

If a report provided by a governmental entity or private

owner under Section 2272.003 identifies a construction defect that

is corrected under Section 2272.004 or for which the governmental

entity or private owner recovers damages, the party responsible for

that construction defect shall pay the reasonable amounts incurred

by the governmental entity or private owner to obtain the report

with respect to identification of that construction defect.

SECTION 7. Effective Date:

This act takes effect on September 1, 2025.