H.B. No. 1999

	AN ACT
	relating to certain construction liability claims concerning
	public buildings and public works.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  Subtitle F, Title 10, Government Code, is
	amended by adding Chapter 2272 to read as follows:
	CHAPTER 2272. CERTAIN CONSTRUCTION LIABILITY CLAIMS
	Sec. 2272.001.  DEFINITIONS. In this chapter:
	(1)  "Action" means a court or judicial proceeding or
	an arbitration. The term does not include an administrative
	action.
	(2)  "Construction" includes:
	(A)  the initial construction of an improvement to
	real property;
	(B)  the construction of an addition to an
	improvement to real property; or
	(C)  the repair, alteration, or remodeling of an
	improvement to real property.
	(3)  "Construction defect" means a deficiency in the
	construction of an improvement to real property, including a
	deficiency in or arising out of the design, specifications,
	surveying, planning, or supervision of the construction, that is
	the result of:
	(A)  the use of defective materials, products, or
	components in the construction;
	(B)  a violation of a building code applicable by
	law to the construction;
	(C)  a failure of the design of an improvement to
	real property to meet the professional standards of care applicable
	at the time of governmental approval of the design or as otherwise
	applicable if no governmental approval of the design was required
	or obtained; or
	(D)  a failure to perform the construction in
	accordance with the accepted trade standards for good and
	workmanlike construction.
	(4)  "Contractor" means a person engaged in the
	business of developing, constructing, fabricating, repairing,
	altering, or remodeling improvements to real property.
	(5)  "Design professional" means an individual
	registered as an architect under Chapter 1051, Occupations Code, or
	a person licensed as an engineer under Chapter 1001, Occupations
	Code.
	(6)  "Governmental entity" means:
	(A)  the state;
	(B)  a municipality, county, public school
	district, or special-purpose district or authority;
	(C)  a district, county, or justice of the peace
	court;
	(D)  a board, commission, department, office, or
	other agency in the executive branch of state government, including
	an institution of higher education as defined by Section 61.003,
	Education Code;
	(E)  the legislature or a legislative agency; or
	(F)  the Supreme Court of Texas, the Texas Court
	of Criminal Appeals, a court of appeals, or the State Bar of Texas
	or another judicial agency having statewide jurisdiction.
	(7)  "Subcontractor" means a contractor directly
	retained and compensated by another contractor to perform labor or
	perform labor and supply materials in the construction.
	(8)  "Supplier" means a person who provides only
	materials, equipment, or other supplies for the construction.
	Sec. 2272.002.  APPLICABILITY OF CHAPTER. (a) This chapter
	applies only to a claim:
	(1)  for:
	(A)  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
	(B)  indemnity or contribution for damages
	described by Paragraph (A);
	(2)  asserted by a governmental entity with an interest
	in the public building or public work affected by the alleged
	construction defect; and
	(3)  asserted against a contractor, subcontractor,
	supplier, or design professional.
	(b)  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
	.
	Sec. 2272.003.  REPORT. (a) Before bringing an action
	asserting a claim to which this chapter applies, the governmental
	entity must provide each party with whom the governmental entity
	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 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.
	Sec. 2272.004.  OPPORTUNITY TO INSPECT AND CORRECT. (a)
	Before bringing an action asserting a claim to which this chapter
	applies, the governmental entity must allow each party with whom
	the governmental entity 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 to correct any construction defect or related
	condition identified in the report.
	(b)  The governmental entity 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;
	(B)  cannot provide liability insurance or
	workers' compensation insurance;
	(C)  has been previously terminated for cause by
	the governmental entity; or
	(D)  has been convicted of a felony; or
	(2)  the governmental entity 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.
	Sec. 2272.005.  TOLLING OF LIMITATIONS AND REPOSE PERIODS.
	If the report and opportunity to correct required by Sections
	2272.003 and 2272.004 are provided during the final year of a
	limitations or repose period applicable to the claim, the
	limitations or repose period is tolled until the first anniversary
	of the date on which the report is provided.
	Sec. 2272.006.  DISMISSAL. (a) If a governmental entity
	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 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.
	Sec. 2272.007.  RECOVERY OF REPORT COSTS. If a report
	provided by a governmental entity under Section 2272.003 identifies
	a construction defect that is corrected under Section 2272.004 or
	for which the governmental entity recovers damages, the party
	responsible for that construction defect shall pay the reasonable
	amounts incurred by the governmental entity to obtain the report
	with respect to identification of that construction defect.
	Sec. 2272.008.  EMERGENCY REPAIRS BY GOVERNMENTAL ENTITY.
	This chapter does not prohibit or limit a governmental entity from
	making emergency repairs to the property as necessary to protect
	the health, safety, and welfare of the public or a building
	occupant.
	Sec. 2272.009.  INSURANCE TREATMENT OF CLAIM. If a party, in
	connection with a potential claim against the party, receives a
	written notice of an alleged construction defect or a report under
	Section 2272.003 identifying a construction defect and provides the
	notice or report to the party's insurer, the insurer shall treat the
	provision of the notice or report to the party as the filing of a
	suit asserting that claim against the party for purposes of the
	relevant policy terms.
	SECTION 2.  (a)  Chapter 2272, Government Code, as added by
	this Act, applies only to a cause of action that accrues on or after
	the effective date of this Act.
	(b)  Section 2272.009, Government Code, as added by this Act,
	applies only to an insurance policy delivered, issued for delivery,
	or renewed on or after January 1, 2020.
	SECTION 3.  This Act takes effect immediately if it receives
	a vote of two-thirds of all the members elected to each house, as
	provided by Section 39, Article III, Texas Constitution. If this
	Act does not receive the vote necessary for immediate effect, this
	Act takes effect September 1, 2019.
	______________________________	______________________________
	President of the Senate	Speaker of the House
	I certify that H.B. No. 1999 was passed by the House on April
	25, 2019, by the following vote:  Yeas 99, Nays 34, 1 present, not
	voting; and that the House concurred in Senate amendments to H.B.
	No. 1999 on May 23, 2019, by the following vote:  Yeas 108, Nays 34,
	2 present, not voting.
	______________________________
	Chief Clerk of the House
	I certify that H.B. No. 1999 was passed by the Senate, with
	amendments, on May 21, 2019, by the following vote:  Yeas 29, Nays
	2.
	______________________________
	Secretary of the Senate
	APPROVED: __________________
	Date
	__________________
	Governor