Monitoring the Session

SB 1612

Johnson Trust Fund Bill Shields Owners Who Never Set Aside Retainage

Did not pass

Verdict: Smells

SmellsInitial review
Sen. Nathan JohnsonDSenate 16
Why it's charged
The hole

THE TEXT

“A trustee is not liable for any damages to a beneficiary for failure to reserve funds required to be reserved under Section 53.101 unless the trustee failed to reserve the funds with intent to defraud.”

Bill text, House committee report version (H)

The pitch is to protect reserved funds for unpaid contractors. An owner who simply fails to set the money aside faces no damages unless intent to defraud is shown, so the plain case of retainage that was never held largely escapes.

The hole

Initial review · graded Oct 22, 2026 · Headline, summary and grade are analysis of the bill text, not a finding about any person · How we grade

Caption

relating to construction contract trust funds.

Caption from analyzed text · version H.

Summary

The 10% retainage becomes trust money. No damages for skipping it unless the owner meant to cheat.

The bill treats the 10 percent retainage that property owners must hold back on construction jobs as trust money that contractors, subcontractors, laborers and suppliers can claim. That protection comes with tight limits: it applies only where workers have perfected a lien and a lender holds a senior lien, it does not start until the lender pays the funds to the owner, and it ends if the owner releases the money early in good faith. Owners who never set the money aside are largely shielded, with no misapplication finding for homes of one to four units and no damages unless they meant to defraud, while the winner of any trust fund lawsuit now gets attorney's fees.

Labels

Labels: ZOMBIE BILL. Died 2 times: 88R HB 1963 by Rep. Leach (Did not pass) and this bill (Did not pass). Checked against 88R only.DO-OVER. Reworked text of a bill filed before that died: 88R HB 1963 by Rep. Leach (Did not pass). Filed in 2 sessions, counting this one. Checked against 88R only.TRY NO. 2. Filed in 2 sessions: 88R and 89R. Checked against 88R only.CROSS-PARTY HANDOFF. Lead author Nathan Johnson (D) in the Senate. Lead sponsor Keith Bell (R) in the House. Party as the Legislative Reference Library lists it for the 89th Legislature.GOT HALFWAY. Passed the Senate on Apr 24, 2025. Died in the House: voted out of the Trade, Workforce & Economic Development committee 10-0, then taken up on the floor on May 23, 2025 and postponed on May 26, 2025.

Receipt

The receipt

89R-SB1612 · 2025-02-25

SOLD BY

Sen. Nathan JohnsonDSenate 16

ITEM

relating to construction contract trust funds.

WHAT IT DOES

The 10% retainage becomes trust money. No damages for skipping it unless the owner meant to cheat.

The bill treats the 10 percent retainage that property owners must hold back on construction jobs as trust money that contractors, subcontractors, laborers and suppliers can claim. That protection comes with tight limits: it applies only where workers have perfected a lien and a lender holds a senior lien, it does not start until the lender pays the funds to the owner, and it ends if the owner releases the money early in good faith. Owners who never set the money aside are largely shielded, with no misapplication finding for homes of one to four units and no damages unless they meant to defraud, while the winner of any trust fund lawsuit now gets attorney's fees.

CHARGES

[x] THE HOLEanalysis confidence 60%

THE TEXT

“A trustee is not liable for any damages to a beneficiary for failure to reserve funds required to be reserved under Section 53.101 unless the trustee failed to reserve the funds with intent to defraud.”

Bill text, House committee report version (H)

The pitch is to protect reserved funds for unpaid contractors. An owner who simply fails to set the money aside faces no damages unless intent to defraud is shown, so the plain case of retainage that was never held largely escapes.

TOTAL

No significant fiscal implication to the State is anticipated.

LBB estimate · fiscal note version H · source

Sources

Fiscal note · version H · May 2, 2025

No first-year general revenue figure available here.

LBB published estimates · flow over the stated periods.

Source snapshot 2026-10-19, Central time.

HISTORY

  1. Received by the Secretary of the Senate
  2. Filed
  3. Read first time
  4. Referred to Business & Commerce
  5. Scheduled for public hearing on . . .
  6. Considered in public hearing
  7. Testimony taken in committee
  8. Left pending in committee
  9. Considered in public hearing
  10. Vote taken in committee
  11. Reported favorably w/o amendments
  12. Recommended for local & uncontested calendar
  13. Committee report printed and distributed
  14. Placed on local & uncontested calendar
  15. Laid before the Senate
  16. Read 2nd time & passed to engrossment
  17. Vote recorded in Journal
  18. Three day rule suspended
  19. Record vote
  20. Read 3rd time
  21. Passed
  22. Record vote
  23. Reported engrossed
  24. Received from the Senate
  25. Read first time
  26. Referred to Trade, Workforce & Economic Development
  27. Considered in public hearing
  28. Committee substitute considered in committee
  29. Reported favorably as substituted
  30. Comte report filed with Committee Coordinator
  31. Committee report distributed
  32. Committee report sent to Calendars
  33. Considered in Calendars
  34. Placed on General State Calendar
  35. Read 2nd time
  36. Postponed 5/26/25 10:00 AM
  37. Laid out as postponed business
  38. Postponed 6/22/25 10:00 AM
FILED UNDER

SPEECH AND LAWFARE

THE TEXT

“A trustee is not liable for any damages to a beneficiary for failure to reserve funds required to be reserved under Section 53.101 unless the trustee failed to reserve the funds with intent to defraud.”

Bill text, House committee report version (H)

The bill shields owners from damage suits over unreserved retainage and adds mandatory attorney's fees for the winning side in trust fund suits.

SIGNED FOR BY

Senate · 31 yea · 0 nay

Sources

Senate: Final passage · Apr 24, 2025. Journal. Published stock for this vote. Snapshot 2026-10-19, Central time.

All floor motions and other positions below.

Smells

THANK YOU FOR CHECKING THE RECEIPT

CAMPAIGN PAID FOR BY

CAMPAIGN PAID FOR BY

Nathan Johnson

Donors

Daniel Cocanougher$250,000Texas Sands PAC$130KMarguerite Hoffman$125,000

Not tied to this bill.

Sources

The author's campaign account only. Own money and internal transfers are separate on the member page.

Derived itemized flow · Jul 1, 2024 to Oct 24, 2026. State data as of Nov 4, 2026.

Derived itemized contributions on live regular reports and uncovered special-session dates. Internal account transfers and daily reports are excluded.

Daniel Cocanougher$250,000.00
Texas Sands PAC$129,500.00

Texas Sands PAC

$129,500.00

Cash
$129,500.00
Paid by others
$0.00
Total
$129,500.00

Also funds 121 other sitting lawmakers.

Derived recipient stock · Jul 3, 2024 to Oct 24, 2026. State data as of Nov 4, 2026.

TEC account match.

Team
Sources

Derived itemized flow · Nov 27, 2024 to May 12, 2026. State data as of Nov 4, 2026.

Derived itemized contributions on live regular reports and uncovered special-session dates. Internal account transfers and daily reports are excluded.

Report IDs: 100990378, 101033698, 101040111, 101052272.

Marguerite Hoffman$125,000.00
Money

Missing data does not establish zero giving. Display amounts are rounded.

×

Texas Sands PAC

$129,500.00

Cash
$129,500.00
Paid by others
$0.00
Total
$129,500.00

Also funds 121 other sitting lawmakers.

Derived recipient stock · Jul 3, 2024 to Oct 24, 2026. State data as of Nov 4, 2026.

TEC account match.

Team
Sources

Derived itemized flow · Nov 27, 2024 to May 12, 2026. State data as of Nov 4, 2026.

Derived itemized contributions on live regular reports and uncovered special-session dates. Internal account transfers and daily reports are excluded.

Report IDs: 100990378, 101033698, 101040111, 101052272.

Votes3

Senate Apr 24, 2025

Final passage

Yea
31
Nay
0
Present, not voting
Not printed
Absent
Not printed
Excused
Not printed
Names

Senate journal

Names were not printed. No individual positions are inferred.

The journal row lists three votes in order: passage to engrossment, suspension of the three-day rule, and final passage. This entry records final passage. Repeated tallies belong to separate votes.

Sources

SB 1612 (Johnson) Relating to construction contract trust funds. (viva voce vote) (31-0) (31-0)

Published stock of positions for this vote, except where marked derived.

  • Yea: 31 (published)
  • Nay: 0 (published)
  • Present, not voting: Not printed
  • Absent: Not printed
  • Excused: Not printed

Senate journal. Source snapshot 2026-10-19, Central time.

Senate Apr 24, 2025

Suspension of the three-day rule

Yea
31
Nay
0
Present, not voting
Not printed
Absent
Not printed
Excused
Not printed
Names

Senate journal

Names were not printed. No individual positions are inferred.

The journal row lists three votes in order: passage to engrossment, suspension of the three-day rule, and final passage. This entry records suspension of the three-day rule. Repeated tallies belong to separate votes.

Sources

SB 1612 (Johnson) Relating to construction contract trust funds. (viva voce vote) (31-0) (31-0)

Published stock of positions for this vote, except where marked derived.

  • Yea: 31 (published)
  • Nay: 0 (published)
  • Present, not voting: Not printed
  • Absent: Not printed
  • Excused: Not printed

Senate journal. Source snapshot 2026-10-19, Central time.

Senate Apr 24, 2025

Passage to engrossment

Yea
Not printed
Nay
Not printed
Present, not voting
Not printed
Absent
Not printed
Excused
Not printed
Names

Senate journal

Names were not printed. No individual positions are inferred.

The journal row lists three votes in order: passage to engrossment, suspension of the three-day rule, and final passage. This entry records passage to engrossment. Repeated tallies belong to separate votes.

Voice vote. No numeric tally or individual yeas are inferred.

Sources

SB 1612 (Johnson) Relating to construction contract trust funds. (viva voce vote) (31-0) (31-0)

Published stock of positions for this vote, except where marked derived.

  • Yea: Not printed
  • Nay: Not printed
  • Present, not voting: Not printed
  • Absent: Not printed
  • Excused: Not printed

Senate journal. Source snapshot 2026-10-19, Central time.

Witnesses17
For
13
Against
4
On
0
Names

For

  • Associated Builders and Contractors of Texas1 registration
  • Independent Electrical Contractors of Texas1 registration
  • PHCC1 registration
  • Precast Concrete Manufacturers Assoc. of Texas1 registration
  • Self1 registration
  • Self; Central Texas Subcontractors Association1 registration
  • Self; National Utility Contractors Association of Texas1 registration
  • Self; Prism Electric1 registration
  • Self; Texas Construction Assn1 registration
  • Self; Texas Construction Association1 registration
  • Self; United Mechanical1 registration
  • Texas Construction Association1 registration
  • Texas Crane Owners Assoc.1 registration

Against

  • Self; Houston Real Estate Council1 registration
  • TAM1 registration
  • TCC1 registration
  • TXOGA1 registration
Sources

17 parsed registrations across the loaded witness lists.

Derived stock of witness registrations. Repeated appearances count separately. Organizations and self-representation appear as printed.

Senate witness list. Source snapshot 2026-10-20, Central time.

Fiscal

No significant fiscal implication to the State is anticipated.

LBB estimate · fiscal note version H · source

Sources

Fiscal note · version H · May 2, 2025

No first-year general revenue figure available here.

LBB published estimates · flow over the stated periods.

Source snapshot 2026-10-19, Central time.

How this was graded

Analysis of text version H by claude-opus-5-5, Oct 22, 2026, against the published rubric.

FILED BEFORE

Filed 2 times: 88R and 89R. Checked against 88R only.

88R HB 1963

by Rep. Leach, different lead author · Did not pass · reworked

Introduced text

Last action, May 9, 2023: Committee report sent to Calendars

Relating to construction contract trust funds.

Caption, 88R bill history

Sources

Texas Senate · Filed Feb 25, 2025

05/26/2025 H Postponed

Texas Legislature Online · Introduced · Senate Committee Report · Engrossed · House Committee Report

Data snapshot Oct 26, 2026 at 4:20 AM CDT. Grades, charges, quotes and corrections follow the published record.

Sponsors
Keith BellRHouse 4 Angie Chen ButtonRHouse 112 Cole HefnerRHouse 5 Ramon Romero Jr.DHouse 90 Jeff LeachRHouse 67

House committee · Trade, Workforce & Economic Development · Committee vote 10 aye, 0 nay, 1 absent · Out of committee

Senate committee · Business & Commerce · Committee vote 10 aye, 0 nay, 1 absent · Out of committee

Companion

HB 3287 by Bell, Keith (identical)

Subjects

Business & Commerce--General

Civil Remedies & Liabilities

Housing--General

Property Interests--Real Property

Property Interests--Trusts

ATTORNEY'S FEES

BUILDING CONSTRUCTION

Text

The text as introduced · 315 words

89R4650 SCR-F

By: Johnson
S.B. No. 1612

A BILL TO BE ENTITLED

AN ACT

relating to construction contract trust funds.

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

SECTION 1. Section 162.001, Property Code, is amended by

adding Subsection (a-1) to read as follows:

(a-1) Except as provided by this subsection, funds reserved

or required to be reserved under Section 53.101 are trust funds

under this chapter. Funds reserved or required to be reserved under

Section 53.101 for the construction or repair of a new or existing

single-family house, duplex, triplex, or quadruplex, to be used for

residential purposes, including improvements appurtenant to the

residence, are not trust funds under this chapter.

SECTION 2. Section 162.003(a), Property Code, is amended to

read as follows:

(a) An artisan, laborer, mechanic, contractor,

subcontractor, or materialman who labors or who furnishes labor or

material for the construction or repair of an improvement on

specific real property in this state is a beneficiary of any trust

funds :

(1) paid or received in connection with the

improvement ; or

(2) reserved or required to be reserved under Section

53.101 in connection with the improvement .

SECTION 3. Subchapter B, Chapter 162, Property Code, is

amended by adding Section 162.034 to read as follows:

Sec. 162.034. ATTORNEY'S FEES AND COSTS. The court shall

award costs and reasonable attorney's fees to a beneficiary who

prevails in an action brought against a trustee under this chapter.

SECTION 4. (a) Except as provided by Subsection (b) of this

section, the changes in law made by this Act apply only to a

construction contract that is entered into on or after the

effective date of this Act.

(b) Section 162.034, Property Code, as added by this Act,

applies only to an action commenced on or after the effective date

of this Act.

SECTION 5. This Act takes effect September 1, 2025.