2017 Legislative Updates
January 23, 2018
In Texas, the 85th Legislature enacted several important pieces of legislation relevant to construction. Overall, only 18.3% or 1,211 total bills, passed the Texas Legislature and 50 bills were vetoed by Gov. Greg Abbott. Among other budgetary items, funding for schools was reduced by approximately $1.1 billion and about $2 billion was taken from highway projects.
While high-profile reforms such as lien-law modernization and right-to-repair failed to pass, several important pieces of construction legislation did pass:
SB 807 – Modified Tex. Bus. & Comm. Code § 272.0001, 272.001. Effective Sept. 1, 2017.
The Texas Business & Commerce Code allows a construction contractor working on a project in Texas to void provisions in a construction contract selecting another state’s law or requiring litigation in an out-of-state venue.
SB 807 expanded the ability to void out-of-state choice-of-law and venue provisions to include architect and engineers. It also expanded the statute to include contracts “collateral to or affecting the construction contract.”
HB 3021 – Modified Tex. Govt. Code § 2254.0031. Effective Sept. 1, 2017.
Engineers and architects can no longer be required to indemnify or defend a state governmental entity for claims or liabilities resulting from the negligent acts or omissions of the entity or its employees.
HB 3270 – Modified Tex. Education Code § 22.08341. Effective Sept. 1, 2017.
The Texas Education Code requires background checks for the employees of contractors and subcontractors working on public schools. However, HB 3270 amends the Education Code to exempt employees not working around children. Stated another way, if children are not present, background checks will not be required.
SB 1289 – Modified Tex. Govt. Code § 2252.202. Effective Sept. 1, 2017.
Iron and steel used on state projects must be from the United States. However, there are several exceptions:
- If there are insufficient quantities of US iron or steel;
- If US iron or steel isn’t reasonably available;
- If the quality of U.S. steel is insufficient;
- If there is a more than 20% price increase;
- If buying US iron or steel is inconsistent with the public interest; and,
- Electrical components are not considered to be iron or steel products.
In addition, political subdivisions such as cities and counties are exempt.