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Construction Priorities at the Texas Legislature in 2019

Members of the Texas Legislature are once again in Austin to deliberate and pass laws we all must live under. Unlike 2017, when lawmakers were focused on issues like an immigration crackdown, a Convention of States to rewrite the United States Constitution, and regulations dictating which people could use certain public restrooms, this session promises to be much more focused on substantive eye-level topics like property taxes and school finances. 

As in any session, the construction industry, through its associations, will work to advance public policy in a collaborative way. During a session in which red meat issues like a “bathroom bill” are not front and center – perhaps creating a less chaotic legislative environment – lawmakers may have more bandwidth to deal with some of the industry’s needs. 

But because school finance and property tax legislation will be a heavy lift, it is appropriate to remain somewhat skeptical of how many other topics can be addressed within a limited time frame. 

Per the ABC of Texas, here are some of the group’s priorities for this legislative session, in alphabetical order:

Consistency in Employment Regulation

Recently, the Cities of Austin and San Antonio have adopted Paid Sick Leave Ordinances without any meaningful input from employers.  Other cities have also considered this at the request of outside groups.  Although a recent court decision may pave the way for ruling these to be contrary to statute and the constitution, other initiatives regulating employer/employee relations have been floated.  Local governments in Texas have not traditionally regulated labor practices, leaving that up to the federal and state governments so businesses operating in multiple areas do not have to keep multiple sets of books.  Under our constitution, the state may preempt local governments from engaging in regulations that are more appropriate at the state and federal level.

Design Defects

A recent court case has prevented contractors from suing architects and engineers with whom they do not have a contractual relationship for design defects for which the contractor has been held responsible.  This is not fair when the contractor has no responsibility for the design and the contractor did not uncover the defect.  This bill would place responsibility for design defects where it belongs—the designer.  Of course, this is the law in other states.  

E-Verify (safe harbor)

While ABC of Texas believes immigration enforcement is a federal responsibility, we also recognize that the federal government is not doing its job.  Thus, ABC of Texas can only agree to support E-Verify legislation if the legislation has a safe harbor for false positives (protection from penalties) AND false negatives (protection from liability).

Lien Law Modernization

The current lien law is confusing and cumbersome.  It is full of trip-wires and requirements that, if not followed to the letter, result in a loss of lien rights.  ABC of Texas believes we can do better by designing a system that results in more certainty for payment which would actually reduce lien filings.  This would be an early notice system (instead of debt notice) where owners, banks, and general contractors would know who is on the job in order to make sure those parties (who would be the only parties with lien rights) are paid.  ABC of Texas also believes we should move into this century by encouraging the use of internet filings for these early notices.

Neutrality in State Government Contracting

This bill would prevent any governmental entity that uses state funds or credit from prohibiting or requiring a pre-hire collective bargaining agreement (project labor agreement or PLA).  Although federal law allows these, courts have ruled that those with a proprietary interest in the project can restrict the use of PLAs.  This bill would not prohibit PLAs—a contractor could still choose to use one—but it would keep governmental entities from making that decision when state money or state credit is used.

Public Employee Dues Deduction

Currently, governmental entities can legally collect dues from their employees for labor unions and employee associations.  ABC of Texas believes that governmental entities should not be engaging in this practice which, in some instances, means the collectors are funding entities which have funded the campaigns of members of the governing body.  In many cases, the funds collected are used to fund campaigns against businesses.  This means that governmental entities are indirectly helping fund anti-business activities.

Right to Repair

Current law allows a lawsuit to be filed for a construction defect without giving the responsible contractor the opportunity to make the repair.  This bill would require that the contractor have an opportunity to make the repair before a lawsuit asking for monetary damages could be filed.

Statute of Repose

In Texas, contractors are liable for construction defects for 10 years.  This is out of line with other states and lends itself to predatory practices by plaintiff attorneys (waiting until year 9 and contracting with a governmental entity to perform an inspection, splitting anything recovered with the governmental entity).  Texas should be in line with other states and provide a Statute of Repose closer to 5 years.

We will keep tabs on these issues during the session and let you know whether certain legislation gains traction.