American Subcontractors Association

ASA North Texas Chapter News Bulletins

TCA North Texas Golf Tournament - May 2009
Golf Registration Form

North Texas Representatives at TCA Roundup - February 2009

ASA Announced Award Nominees - January 2009

NEWS RELEASE FROM ASA NATIONAL:

ASA Victory Before Texas Supreme Court Preserves Subcontractors’ Remedies for Nonpayment

ALEXANDRIA, Va. — The Texas Supreme Court handed down a decision on July 3, 2009, agreeing with the American Subcontractors Association Inc.’s position that Texas law affords subcontractors on public work more than one option for recovering funds when they are not paid for their completed work. ASA filed two amicus curiae, or “friend of the court,” briefs, in Dealers Electrical Supply Co. v. Scoggins, asking the Texas Supreme Court to overturn an appeals court decision that said subcontractors on public work could not make claims under Texas’ Trust Funds Act because the only remedy for nonpayment is a claim against a statutorily required (McGregor Act) payment bond. In its briefs, ASA argued that the two remedies were not exclusive, and the high court agreed, stating that “Interpreting the McGregor Act to provide an exclusive remedy for unpaid claims would contravene, rather than further, the purpose of both the McGregor Act and the Trust Fund Act.”

In the underlying case, Dealers Electrical argued that it could use the Trust Funds Act to recover $80,000 it was owed for electrical parts after missing payment bond filing deadlines. A lower court sided with Dealers Electrical, but the 13th Court of Appeals consequently denied Dealers' claim on the grounds that the statutorily required McGregor Act payment bond provided on the project was Dealers' exclusive remedy, and that the Trust Funds Act did not apply when a corporate surety bond was in place.

To ensure that subcontractors would continue to benefit from the remedies for nonpayment that Texas law affords, ASA filed two briefs in support of the supplier. In its May 13, 2008, amicus curiae brief, ASA pointed out that the appeals court misread the McGregor Act as excluding other remedies for nonpayment. The McGregor Act requires payment bonds on state and local public work in Texas. ASA also pointed out that the appeals court erred in citing language from an earlier version of the Trust Funds Act that was no longer in effect when the supplier made its claim. The Trust Funds Act controls the use of construction funds earmarked to pay suppliers and subcontractors. “[The appeals court’s] holdings are incorrect and will have harmful consequences not only for the construction industry but also for public entities, which will face higher construction costs as a result of their suppliers’ decreased ability to compel payment for materials actually delivered, used, and incorporated into public projects,” ASA said in its brief.

In its second brief, jointly filed with the Houston Hispanic Chamber of Commerce, ASA argued that “courts…should not lightly interpret one statutory claim to override another.” Furthermore, the brief stated, “the McGregor Act payment bond complements [other remedies], but it is not – and was never designed to be – an adequate substitute for them.”

“ASA and its Subcontractors Legal Defense Fund have won again,” said 2009-10 ASA President Darlene East, Holes Incorporated, Houston, Texas. “The Texas Supreme Court heard the voice of subcontractors and ruled to protect their rights for payment for work performed. The earlier ruling by the lower court would have restricted our ability to recover payment. The Supreme Court’s decision reversed that ruling, leaving intact current payment protections.”

ASA’s Subcontractors Legal Defense Fund, which supports critical legal activities and protects the common interests of all subcontractors, funded ASA’s activities relating to this case. Funded solely by contributions, SLDF funds are invested in precedent-setting cases across the country. To learn more about this case and the SLDF, visit www.sldf.net.

NEWS RELEASE FROM ASA NATIONAL:

Construction Subcontractors Applaud Secretary Napolitano for Withdrawal of Troubled No-Match Rule

ALEXANDRIA, Va. — The American Subcontractors Association Inc. applauded U.S. Department of Homeland Security Secretary Janet Napolitano for announcing on July 8, 2009, that the Obama administration plans to rescind the “no-match” rule.

“In light of the no-match rule’s troubled history of court challenges, unanswered questions, and re-writes, the decision to rescind the no-match rule is correct,” said 2009-10 ASA President Darlene East, president of Holes Incorporated in Houston, Texas. “Ultimately, the no-match rule would have shifted a large portion of the responsibility for making sure individuals are legal to work in the United States from the government to private employers and employees. Hopefully, Congress and the Obama administration will see the withdrawal of the no-match rule as an opportunity to re-focus on comprehensive reform of our national immigration policy.”

Previously, DHS had denied that the no-match rule represented a shift in policy, but ASA pointed out that the rule would have replaced the current system of verifying documents and completing I-9 forms with a series of steps involving new communications and requirements for employers and employees, including:

Employers checking for clerical errors after receiving a no-match notice, and confirming any clerical corrections with the Social Security Administration or DHS within 30 calendar days.
Employers sending employees who were the subject of a no-match letter to the local SSA office and then following up with DHS or SSA to ensure a match if the problem was not caused by a clerical error. Employers would have to maintain records of such verifications.
Employees completing a new I-9 with a new SSN and a photo ID within 93 calendar days if a “no-match” was not resolved. Employers would have to terminate employees if this step did not resolve the no-match.

ASA objected to the no-match rule’s new paperwork burdens and the costs of compliance in comments filed on April 25, 2008.

ASA North Texas Chapter Newsletters

Summer 2008 (pdf format)

TCA

TCA Newsletter - September 2009 (pdf format)

TCA Newsletter - July 2009 (pdf format)

TCA Newsletter - June 2009 – Legislative Session Wrap-Up (pdf format)

TCA Newsletter - September 2008 (pdf format)

TCA Newsletter - June 2008 (pdf format)

Texas Construction Association - Texas Legislative News – June 30, 2009

SPECIAL SESSION BEGINS WEDNESDAY, JULY 1

Governor Perry has called a Special Session of the Texas Legislature to begin at 10 AM on Wednesday, July 1. The Governor can call the legislature back to Austin for Special Sessions lasting up to 30 days. Under the Texas Constitution the legislature can only consider those issues designated by the Governor in his proclamation.

The proclamation calling the Special Session names three issues:

Extending the existence of several state agencies including the Texas Department of Insurance, the Texas Department of Transportation and the Texas Racing Commission; these Departments were under the sunset review process during the Regular Session of the Legislature and legislation extending the life of these agencies failed to pass.
Issuance of bonds for highway improvements and creation of the Texas Transportation Revolving Fund
Providing the authority of the Texas Department of Transportation and a regional mobility authority to enter into contracts with private entities to build and operate toll roads

Only the issues listed above can be considered by the Legislature during the Special Session. Legislation or amendments germane to the issues listed above can be considered but, if they are not germane or relevant to the issue, they cannot be considered and are subject to being struck down on a point of order brought by any member of the Legislature

Many have urged the Governor to add issues ranging from expansion of the Children’s Health Insurance Program, consideration of stimulus moneys tied to unemployment insurance and, the voter identification bill. Thus far the Governor has refused to add any issues and has made it clear that his desire is to have the Legislature quickly consider and pass legislation on the three designated issues and then adjourn by the end of the week. Statements from the Lt. Governor’s and the Speaker’s Office also indicate their preference to have a quick Special Session.

Whether a quick Special Session can be achieved remains to be seen. As many of our members know, often times the Legislature goes off script and strange things occur. While the legislation extending the life of these agencies another two years, and the legislation dealing with issuance of bonds for road construction are not necessarily controversial, the third item dealing with privatized toll roads, and the legislature’s desire to limit their use can be controversial, and could possibly slow down the legislature. During the Regular Session, legislation with broad support greatly limited the use of privatized toll roads and limited the use to certain designated/existing projects. This legislation failed to pass in the final days of the Session. Observers say any legislation considere d in the Special Session would need to include provisions set out in that legislation in order to strike a balance on the issue. Otherwise there may be considerable debate on this issue and a more prolonged Special Session.

TCA is closely following the filed legislation to determine if issues of interest to the construction industry, including the indemnification and additional insured issues, might be germane to the legislation filed on any of these three issues. Depending on how things develop, TCA may send legislative alerts requiring quick action. Stay tuned.

If you have questions on the Special Session or need additional information, contact Harold Freeman (hfreeman@texcon.org ) or Raymond Risk (rrisk@texcon.org ) or call the TCA offices at 512/473-3773.