American Subcontractors Association

	Legislative/PAC Texas Construction Association - 2011 Legislative Issues - 82nd Legislative Session The Texas Legislature will reconvene for a 140 day session on January 11, 2011. While new issues may arise, the issues listed below are the priority issues set by the Board of Directors for the Texas Construction Association. Broad Form Indemnification. A clause found in construction contracts provides that the subcontractor indemnifies the general contractor or owner for its wrongdoing even though the subcontractor may have done nothing improper . These clauses and certain additional insured endorsements should be made void. They are in direct conflict with the concept that a company should be responsible for its negligent acts. Consolidated Insurance Program (CIPs). Known typically as Owner Controlled or Contractor Controlled Insurance Programs, the use of these "Wrap-Up" programs is increasing in Texas. While possibly a money saver for the Owner, the CIPs are plagued by poor administration, gaps in coverage or lack of coverage, insufficient limits, questionable safety and back to work programs, and auditing practices that cause subcontractor's retainage to be withheld even longer. In many cases, the exposure a subcontractor faces working on a CIP is unknown. In the 2003 session, TCA helped defeat legislation that would have required the use of OCIP's on every public project and has since worked to establish minimum standards for CIPS. Standards should be set for CIPs in Texas. Education. The construction industry needs people who can read, write, communicate, and have a mastery of math needed by the construction trades. The Texas education system should provide for a reasonable non-college career path which allows for a person to obtain a high school diploma. Immigration. Monitor Texas Legislature for bills that affect immigration issues. Oppose Texas legislation that makes employers a principal component of enforcement without providing an appropriate safe harbor for employers who act in good faith. Lien Law Reform. Texas has the most complicated lien laws of any of the 50 States. Our lien laws should be reformed to make them much less complicated and much more user friendly. The existing law needs to be changed to prohibit the waiver of a person’s lien rights prior to getting paid for work performed or materials supplied. The poorly designed process to establish a lien for retained funds should be revised to provide a less onerous system for subcontractors, general contractors, and owners. Loan Default. A lender should be required to give subcontractors and prime contractors notice of an owner's default on a construction loan. This notice will allow for work to be suspended until the default is cured. If a lender fails to provide the notice, the lenders security interest should become subordinate to the value provided by the work performed by the subcontractors and prime contractor. Retainage Interest. If retainage will continue to be withheld for properly completed work, then interest should be paid. Contractors should no longer be bankers for construction projects in Texas. Sovereign Immunity. State sovereign immunity doctrine should be changed for issues involving construction contracts to allow for contractors to sue the state for disputes without the requirement to obtain legislative consent to sue or a legislative appropriation to pay damages. Workers' Compensation. Some lawmakers have become concerned over recent Texas Supreme Court decisions which interpreted Texas statutes effectively to provide the employer immunity from liability to those who have not been an injured worker's employer previously. While pleasing to many in the construction industry, this judicial solution of providing "statutory" employer or workers' compensation as a sole remedy has created angst for others. A solution to the statutory employer/sole remedy issue on construction projects needs to occur. TCA Roundup & Walk on the Capitol, Austin Save the Date: January 31 - February 1, 2011 North Texas Representatives at TCA Roundup - February 2009 (pdf format) TCA Newsletter - September 2009 (pdf format) TCA Newsletter - June 2009 - Legislative Session Wrap-Up (pdf format) TCA Legislative News - May 25, 2007 (pdf format) TCA Legislative News - May 18, 2007 (pdf format) TCA Fall Newsletter 2006 (pdf format)