A major legislative agenda item for the Texas Construction Association was the
Contingent Payment bill, SB 256/HB 541. This bill prescribed the circumstances under which contingent payment (pay-if-paid) clauses would be enforceable in Texas. The bill ran out of time and luck at the end of the Legislative Session and failed to pass. The leadership of TCA has made no bones about it … We will be back!

The Legislative Session began with an agreed compromise bill on contingent payment between the Associated General Contractors-Texas Building Branch and the Texas Construction Association. Both organizations and their members worked hard for passage. However, opposition arose from the Associated General Contractors-Heavy Highway and some General Contractors. This slowed the bill enough where time became a critical factor.

The House version of the bill was set as the first bill on the Major State Calendar for consideration on the House Floor when it and all other bills on the same calendar got caught in the crossfire on Congressional redistricting during the second week of May. The bill died that week when the deadline passed for the consideration of House bills.

Despite TCA bowing to the requests of Senators to make changes in the bill to make it better for general contractors, strong lobbying by the opposition kept the Senate version bottled up in the Senate Committee on Business and Commerce. Like the preceding session, the bill had a hearing in committee, but no vote was taken. No other bills became available to attach the contingent payment bill as an amendment that would have sustained a germaneness challenge.

Many subcontractors and general contractors testified or registered in support of the bill's passage. Those testifying or registering against passage included representatives from Austin Industries, AGC of Texas-Highway, Centex Construction, Zachry Construction and Texas Good Roads.

Unless it gets addressed in a called session, this issue will be back before the Legislature in 2005. While the compromise bill did not pass, many that originally opposed the bill became supportive and saw the need for passage. This took all session to accomplish and then it was too late in the session to get the bill passed. The TCA Board will meet during the interim to determine what type of bill to prepare for next session.