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  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