The Texas Legislature follows a unique legislative calendar and convenes in regular session for 140 days only once every other year. This unusual schedule creates a flurry of new state laws every other year in Texas. These sessions typically convene in January of odd-numbered years and end in May or June. The Legislature can convene in Special Sessions during other times of the year, although the topics for a Special Session are limited to 30 days and to specific topic(s) designated by the Texas Governor.
The 89th Regular Session of the Texas Legislature convened on Tuesday, January 14, 2025. The Regular Session will adjourn on Monday, June 2, 2025. There are several topics of interest to the construction industry expected to be debated during this session. In 2021, the Texas Legislature enacted substantial changes to the Texas statutory mechanic’s lien laws contained in Chapter 53 of the Texas Property Code. There were additional revisions during the most recent Regular Session in 2023 and additional amendments are likely to be discussed in this session.
In 2021, the Texas Legislature enacted substantial changes to the Texas statutory mechanic’s lien laws contained in Chapter 53 of the Texas Property Code. There were additional revisions during the most recent Regular Session in 2023 and additional amendments are likely to be discussed in this session.
In 2023, the Legislature amended the Texas Prompt Pay Act in Chapter 28 of the Texas Property Code applicable to private projects and Chapter 2251 of the Texas Government Code applicable to public projects. These amendments added provisions applicable to “unsigned change orders” and expressly authorized contractors to refuse to proceed with additional work directed by an owner if the “aggregate actual or anticipated value” exceeds ten percent (10%) of the original contract amount. TEX. PROP. CODE § 28.0091 (a). “Anticipated value” was not defined and amendments to these provisions could be discussed during this session.
Both the Texas Construction Association1 and the Texas Building Branch of the AGC of Texas2 are currently advocating for amendments to Chapter 272 of the Texas Business & Commerce Code. This chapter applies to construction contracts for projects located within Texas and makes a forum selection clause designing venue outside Texas “voidable” by the party obligated to perform the work within the state of Texas. TEX. BUS. & COM. CODE § 272.001 (b).
The Fourteenth Court of Appeals in Houston recently held that a subcontractor waived its rights under this statute by agreeing to subcontract terms which incorporated the prime contract. In re MVP Terminalling, LLC, No. 14-21-00399-CV 2002 WL 3592303 (Tex.App.- Houston [14th Dist.] 2023, pet. denied). The prime contract contained a separate forum selection clause requiring venue in Oklahoma. Although the trial court in Houston ruled in favor of the subcontractor and held Section 272.001 of the Texas Business & Commerce Code required venue in Texas, the Fourteenth Court of Appeals in Houston reversed this decision and held the prime contract required venue in Oklahoma. The Texas Supreme Court denied the subcontractor’s appeal in January 2024.3 See In re MVP Terminalling, LLC, No. 14-21-00399-CV (Tex. App. – Houston [14th Dist.] 2022, writ denied).
The Texas Construction Association and the Texas Building Branch of the AGC of Texas are both advocating legislation to reinforce the applicability of Chapter 272, although no legislation had been introduced as of January 22, 2025. Additionally, several courts have interpreted arbitration agreements and have held that Chapter 272 is preempted by the Federal Arbitration Act. See, e.g., Global Indus. Contractors, LLC v. Red Eagle Pipeline, LLC, 617 F. Supp. 3d 633 638 (S.D. Tex. 2022).
A full summary of the 89th Regular Session will follow in a future Under Construction article.
Footnotes
1. https://www.texcon.org/texcon/TCA_Issues.asp
2. https://agctbb.org/advocacy/
3. https://www.texcon.org/NewsBot.asp?MODE=VIEW&ID=30363
